CBK prohibits collection of Visa and MasterCard cancellation fees during free year
These new measures mark another milestone in the Central Bank’s ongoing efforts to strengthen financial consumer protection, promote transparency, and enhance confidence in Kuwait’s banking system.
CBK prohibits collection of Visa and MasterCard cancellation fees during free year
These new measures mark another milestone in the Central Bank’s ongoing efforts to strengthen financial consumer protection, promote transparency, and enhance confidence in Kuwait’s banking system.
In a move aimed at strengthening consumer protection and enhancing transparency in the banking sector, the Central Bank of Kuwait (CBK) has issued updated instructions under its Bank Customer Protection Guide, which introduces a series of key reforms designed to safeguard customer rights, ensure fair treatment, and promote financial inclusion across society.
Among the most significant updates is the prohibition on collecting cancellation fees for Visa and MasterCard credit cards that are granted free of charge during the first year. The Central Bank clarified that banks are not entitled to charge any fees or expenses if the customer chooses to cancel their card within the free period, reaffirming its commitment to protecting consumers from misleading promotional practices, according to q8press.com
Clearer Rules for “Free” Services
To address long-standing confusion over credit card renewal fees, the Central Bank emphasized that advertising free services must come with clear terms and conditions. Customers must be explicitly informed of all renewal procedures and potential fees before the promotional period ends.
Furthermore, the CBK introduced a new principle prohibiting automatic renewal of credit cards without the cardholder’s consent. Banks are now required to notify customers at least three months prior to renewal through approved communication channels, detailing cancellation procedures and any renewal costs such as annual or additional fees.
Faster Complaint Handling
In a major step to improve customer service, the Central Bank reduced the maximum response time for banks to address customer complaints from 15 working days to 5.
Banks must now establish performance indicators to measure complaint handling efficiency, including customer satisfaction levels and the quality of complaint resolution. These indicators are to be submitted quarterly to the bank’s CEO, encouraging continuous improvement and accountability in customer service.
Transparent Information and Better Comparisons
To enhance financial awareness and help customers make informed decisions, banks are now obligated to provide a “Basic Information Document” for every product or service before signing any contract.
This document must include key details such as fees, features, obligations, and eligibility requirements.
Additionally, the CBK has approved a new rule requiring banks to disclose the Annual Percentage Rate (APR) for all credit products. This will enable customers to compare the cost of financing across different banks easily, ensuring they receive the most competitive rates.
Similarly, the APR feature will apply to all deposit products, helping savers identify the best available returns on their funds. To further empower customers, banks will soon provide online calculators for financing and credit card products.
Support for Minors and People with Special Needs
The updated guide also introduces specific controls for accounts held by minors, clarifying the role of custodians and ensuring that services are tailored to this segment’s needs, including financial literacy development.
For customers with special needs, the CBK emphasized that banking transactions should be facilitated without requiring witnesses unless requested by the customer, and that all banks must update their websites and mobile applications to comply with international accessibility standards.
Implementation Deadline
Banks must fully implement these updates by the end of April 2026, ensuring that all procedures, systems, and customer communications comply with the Central Bank’s enhanced regulatory standards.
Key Updates at a Glance
- Prohibition of Visa and MasterCard cancellation fees during the free year.
- Mandatory customer notification three months before automatic renewal.
- Reduction of complaint response time from 15 to 5 working days.
- Requirement to disclose APR for credit and deposit products.
- Introduction of basic information documents for all banking services.
- Enhanced accessibility and rights for customers with special needs.
- Clear regulations for accounts opened for minors.
- Deadline for implementation April 2026.
These new measures mark another milestone in the Central Bank’s ongoing efforts to strengthen financial consumer protection, promote transparency, and enhance confidence in Kuwait’s banking system.
