- The revised framework aims to ensure equal treatment across customer categories, strengthen financial inclusion and encourage responsible borrowing while safeguarding retirees’ ability to meet their financial obligations.
The Central Bank of Kuwait (CBK) has raised the maximum monthly loan instalment limit for retirees from 30 to 40 percent of their net pension, bringing them in line with employees and expanding their access to personal financing.
The decision follows amendments to the rules governing loans and personal financing for consumer and housing purposes. In a circular issued to local banks, investment companies and finance companies, the CBK replaced the previous 30 percent ceiling for retirees with a uniform limit of 40 percent of net monthly income.
Under the revised regulations, both employed customers and retirees can now allocate up to 40 percent of their net monthly salary or pension towards loan instalments.
The amendments also cover provisions governing financing periods, monthly instalment amounts and the terms of financing contracts with retirees. They also include changes to regulations concerning the maximum credit card limits issued by local banks.
The CBK stressed that banks, investment companies and finance companies must conduct a comprehensive credit assessment before granting financing to retirees. The assessment must clearly outline the financial implications of the loan and determine the amount of net pension that will remain available to the borrower throughout the repayment period.
It also emphasised that retirees must be fully informed of the findings of the credit assessment and understand the financial commitments involved before accepting financing.
The revised framework aims to ensure equal treatment across customer categories, strengthen financial inclusion and encourage responsible borrowing while safeguarding retirees’ ability to meet their financial obligations.
