Kuwait’s central bank is changing the rules that govern loan limits at local banks in a bid to enhance their ability to lend and boost the economy.
Mohammed Al-Hashel, governor of central bank, said the new rules allow banks to extend loans against funding that includes deposits and other sources such as bonds and sukuk. They can lend between 75 percent and 100 percent of their funding levels depending on when the financial resources mature, it said. The new rules, which replace an 85 percent loan-to-deposit ratio, will take effect May 11 and be implemented gradually.
The new guidelines “contribute to boosting liquidity at banks,” al-Hashel said. The rules “come within the framework of measures aimed at expanding the lending capability of banks in a manner that enhances the role required of them in financing economic development projects,” he said, according to Bloomberg.
