Central Bank of Kuwait halts dinar fees for low-balance inactive accounts
Banks are now prohibited from charging a dinar fee on dormant accounts with balances below 100 dinars, even if the balance reaches zero, under the new regulatory directive.
• The Central Bank of Kuwait has mandated the cancellation of a monthly two-dinar charge on inactive accounts and a five-dinar fee for updating customer data, both previously imposed by some banks.
• The Central Bank removed 22 dinars in fees, including 12 dinars for annual balance messages, now provided for free despite continued service offerings by banks.
• Fees on minimum balances discourage low-income customers from opening accounts and reduce the incentive to open savings accounts for children due to fluctuating balances.
The Central Bank of Kuwait has instructed banks to halt the practice of charging a dinar fee when a customer’s inactive account balance falls below 100 dinars. According to the new regulatory directive, banks are prohibited from deducting any fees for accounts that fall below the minimum balance, even if the balance reaches zero, banking sources told Al Rai newspaper.
The sources pointed out that supervisory observations revealed some banks were deducting two dinars per month on inactive accounts, claiming the balance exceeded the minimum allowed. They explained that, given the extended inactivity of some accounts—due to reasons such as account holders being abroad, forgetting, or even neglect—the Central Bank directed banks to stop collecting this fee.
Non-salary accounts
The sources further explained that the deduction of the dinar fee was not limited to inactive accounts. Some banks were also charging two dinars on other types of accounts (aside from salary accounts), including prizeaccounts, if the balance fell below a specific threshold. Some banks set a minimum balance of 200 dinars, while others set it at 100 dinars.
They noted that, prior to the circular, some banks excluded salary accounts from this deduction, but the new directive now requires all banks to stop deducting the minimum fee from all types of accounts, including dormant accounts, prize accounts, and children’s accounts.
The sources also pointed out that, as part of this scope, the Central Bank has required banks to cancel the five dinar fee previously charged for updating customer data in their branches. This followed the earlier cancellation of the same fee for updating customer data online.
This move is aimed at encouraging customers to keep their data updated according to the “Know Your Customer” (KYC) model. The step also aligns with banks’ responsibilities under anti-money laundering and terrorist financing regulations, making data updates a shared obligation between banks and customers.
According to the latest cancellation, a total of 12 dinars in banking fees have been removed from the list of bank services, in addition to the ten dinars that were previously canceled. Banks used to collect these fees annually for balance messages, but this service is now provided for free. So why did the Central Bank of Kuwait remove a total of 22 dinars in fees, despite banks continuing to offer the corresponding services?
The sources explained that the regulator’s aim with these cancellations is to enhance financial inclusion. The removal of these fees is part of the effort to facilitate access to banking and financial services for all segments of society. They pointed out that requiring customers to pay a specific fee for certain services may discourage them from using them or reduce their willingness to activate them on time, such as when updating personal data.
Financial and economic stability
The sources further noted that the continued application of fees related to the minimum balance pushes low-income customers to avoid opening bank accounts. It also reduces the incentive for others to open side accounts in the names of their children to save on their behalf, as these accounts may fluctuate in balance from time to time.
Promoting financial inclusion has become one of the central banks’ most important goals in achieving financial and economic stability. It serves as a way to bring all segments of society under the umbrella of banking support, especially for low- and middle-income individuals who have historically been excluded from easy access to financial services. The rise of financial technology, through mobile and internet technologies, has made it easier and cheaper for people to access these services.
