Kuwait’s local banks want the government to pay about 400 million dinars in arrears which is the cost of interest on consumer loan because the payment of installments were postponed for 6 months, starting from April 2021 until October of the same year for both the residents and citizens.
A local Arabic daily quoting banking sources pointed out that the collection of consumer loan installments for citizens and residents due to the repercussions of the Corona pandemic was postponed for 6 months for the first time from April 2020 until October of the same year, so that the banks bore the cost of the delay, which at that time amounted to about 380 million dinars, while a law was issued in April 2021 to postpone installments for citizens for 6 months as well, provided that the government bears the cost of this period, but the due amounts as a result of this postponement but have not yet paid.
According to the same sources the bank officials took several steps some time ago to find out the government’s mechanism for paying the interests of deferring loans overdue for about 10 months, explaining that their moves in this context included more than one party, including the supervisory regulator.
The supervisory regulator, the sources said, did not direct the banks to take specific binding measures, but it was a supervisory and banking understanding that the banks would continue to adopt the policy of giving the government more time and patience to receive its dues resulting from postponing its installments, specifically so that the government can fulfill its basic obligations.
The sources said that the banks understand the delay in paying their dues until the end of last year, on the basis of the state of the public finances when the decision to postpone the installments was issued, which gave priority to the payment of salaries and urgent arrears in the budget, whether for the last or current fiscal year.
The sources indicated that the banks are currently working to obtain a government promise of specific payment dates, even in installments, with appropriate financial surpluses in the General Reserve Fund that cover their entitlements, indicating that what encourages them to do so is that it is time for the government to pay what it owes to the banks with the improvement in public finance revenues during the last period.
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