KUWAIT CITY: The central bank of Kuwait ordered all local banks to start receiving financial transactions related to individual consumer loans, installments and credit cards through electronic platforms and remote banking from Sunday.
The move came after most banking operations were suspended for more than two months due to the pandemic novel coronavirus (COVID-19) outbreak that has rendered almost the entire corporate sector in the country inactive.
The same sources told the daily that banks had started to receive transactions under the new discount rate set at 1.5% by the Central Bank of Kuwait, and expected a high participation of customers in loans to the Bank. consumption and installment due to the low interest rate offered. They also said that the return of individual funding indicates a gradual return to normal life in the coming period due to the fact that loans are tied to a large segment of citizens and expatriates and are relatively large in the loan and financing portfolios of local banks. and finance companies.
According to the latest data published on the website of the Central Bank of Kuwait, consumer loans granted to the client for the purpose of financing the purchase of personal needs and durable goods or the cost of education or medical treatment, and paid in monthly installments for a period not exceeding five years, amounted to KD 1.49 billion at the end of last February.
As for simplified loans, these are long-term personal loans granted to citizens to restore or buy private housing, and they are paid in monthly installments for a period not exceeding 15 years. Currently, simplified loans have reached KD 11.98 billion.
At the same time, in light of various fast-track regulatory laws to help banks cope with the repercussions of the coronavirus crisis, the Central Bank is holding lengthy meetings with bank officials on more than one file, including reassessing key positions. debt, added the daily. .
He said the Central Bank had asked each bank to determine the level of cash flow and profitability, the future value of their collateral and the extent of their ability to pay their obligations on time if they were exposed to a set. difficult scenarios.
This should be by explaining whether any of them had ever submitted to their bank a request for deferment of debt payments or rescheduling due to the consequences of the coronavirus. The banks had previously decided to postpone by six months the maturities of loans to individuals, small and medium-sized enterprises and institutions affected by the “corona” from last March until next September, without penalties or late fines, thus relieving the repayment pressure on all customers.
Based on the study prepared by the Senior Steering Committee for Economic Stimulation, headed by Central Bank Governor Dr Muhammad Al-Hashel, the revenues of affected sectors in Kuwait are expected to decline by 15-30%, in shutdown scenarios. for a period of 8 to 12 weeks, since the start of the government shutdown, with varying impacts for each sector, he noted. He recalled that the rate of decline in global economic activity in the second quarter of 2020 will likely be the most severe since World War II.
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