According to Banking sources cited by Al-Rai, the Central Bank of Kuwait has instructed banks to begin opening accounts for all customer segments, including low-income individuals, job holders, service and craft workers, and domestic workers.
The sources stated that the regulatory directive mandates banks to simplify procedures and prohibits them from refusing to open accounts for these customer segments based on salary or income barriers. In essence, this removes the minimum salary requirement for account opening, allowing middle and low-income individuals to access banking services across all local banks.
Financial Inclusion
The sources indicated that the regulatory authority views the removal of the minimum salary requirement for opening bank accounts as part of its commitment to financial inclusion, ensuring access to financial and banking services for all segments of society.
This initiative aims to facilitate account opening through official channels with appropriate quality and cost while safeguarding the rights of beneficiaries. It also enables individuals to access financing, manage their money effectively, and enhances the secure storage of funds as well as the ability to send and receive payments.
The sources explained that such barriers no longer align with the regulatory body’s goal of promoting financial inclusion in the banking sector. Restricting access to bank accounts for certain groups prevents a large segment of individuals from obtaining useful and affordable financial products and services, pushing their financial transactions outside the formal banking system. They emphasized that simplifying the process for opening low-value and low-cost bank accounts; support the broader policy of expanding digital payments.
It is worth noting that, according to the latest data, domestic workers made up 26.9% of Kuwait’s total workforce, numbering approximately 786,380 out of 2.927 million workers by the end of the first half of 2024. Additionally, they accounted for 31.8% of the expatriate workforce, which totaled 2.475 million.
The Central Bank emphasized the importance of simplifying procedures for opening bank accounts for all segments of society without discrimination, stating that exclusions are no longer justified, whether for depositing or withdrawing money. It stressed that banks must promptly take the necessary steps to eliminate obstacles preventing certain groups from opening accounts, aligning with the regulatory and banking sector’s commitment to enhancing financial inclusion.
Better Opportunities
The sources clarified that these facilitation measures extend beyond opening bank accounts to include lending and accepting small deposits, ensuring that individuals from all segments of society can access various financial services with ease. This approach aims to provide better opportunities for managing and utilizing their finances effectively.
First Step
The sources noted that the ability to open a bank account is a crucial first step toward the broader adoption of financial services. A transaction account enables individuals to store money, send, and receive payments, serving as a gateway to access additional financial services.
The sources stated that enabling low- and middle-income customers to open accounts for their transactions remains a key focus of the regulatory system. This is expected to encourage these individuals to expand their use of other financial services, such as money transfers and limited credit, which could improve their overall quality of life, though at a limited scale.
The sources stated that banks will comply with the Central Bank’s directives to open accounts for individuals with small salaries, including those categorized as worker account holders. However, banks will not actively market these accounts. While all banks will open these accounts upon customer request, they will not seek to attract this segment due to the operational pressures these accounts place on banking systems.
Additionally, these accounts are not expected to provide tangible benefits for the custodian bank, as the salaries of this segment are typically withdrawn immediately after being deposited, without remaining in current accounts for extended periods.
Financial Inclusion Includes Small and Medium Enterprises
The sources mentioned that the Central Bank’s efforts to enhance financial inclusion through banking extend beyond individuals to include facilitating access to financial and banking services for all types of companies, including small and medium-sized enterprises. The Central Bank is also focused on the continuous monitoring of the services provided by banks to this segment.
Importantly, the sources pointed out that the regulatory system is working to develop strategies and policies to achieve financial inclusion, including encouraging the use of modern financial technologies through official financing channels. This approach aims to reduce banks’ operational costs and, in turn, ease the pressures that may reduce their willingness to engage with low-income customers.
