CBK directs banks to block non-compliant accounts, waives update fees

The Central Bank of Kuwait (CBK) has instructed local banks to intensify efforts in updating customer data and monitoring account activity as part of enhanced anti-money laundering and counter-terrorism financing (AML/CFT) measures. Banks must take action against customers who fail to update their data by the specified deadline, including freezing accounts.

Sources told Al-Rai that banks will increase communication with customers, sending at least three reminders across various channels before freezing non-compliant accounts. Banks are expected to become stricter, reversing past leniency, and will likely increase the number of frozen accounts.

Account reactivation will only occur after customers complete the update process and visit their branch. Update frequency depends on risk level: high-risk customers annually, medium-risk every two years, and low-risk every three years. Warning periods vary by bank, though many use a two-week window with reminders every five days.

As an incentive, the CBK has instructed banks to cancel fees associated with data updates, both in-branch and online, and stop deducting the KD 2 fee from dormant accounts with balances under KD 100.

The Know Your Customer (KYC) form includes updating civil ID, nationality, address, income sources, and other personal information. Banks must verify submitted data using original documents and reliable sources.

The CBK emphasized that these steps align with its due diligence policies to improve AML/CFT systems. Banks must establish clear procedures and timelines for data updates and account reactivation, ensuring customer notifications via at least two communication channels, such as SMS, mobile apps, ATMs, and recorded calls.

Separately, the CBK issued KWD 200 million in three-month bonds and Tawarruq at a 4.125% return.