KUWAIT CITY - The Central Bank of Kuwait (CBK) has instructed all local banks to strengthen their due diligence processes by enhancing efforts to update customer data and closely monitor account activity.

This move is part of the broader national strategy to reinforce anti-money laundering and counter-terrorism financing (AML/CTF) systems, as banks are urged to take proactive steps to identify and mitigate financial risks.

The CBK has emphasized that failure to comply with these directives will result in appropriate disciplinary actions, including the freezing of bank accounts that are not updated within the specified deadlines.

Banks have been told to increase their communication frequency with customers through various established channels such as mobile messages, app notifications, emails, ATM alerts, and call center messages, urging them to update their information. Customers will typically receive three warning messages at five-day intervals before their accounts are frozen.

Account Freeze Procedures

Banks are now expected to enforce stricter measures, including freezing accounts whose holders fail to complete the mandatory data update on time. Previously, banks had shown leniency in enforcing these updates, but with increased regulatory oversight, the number of frozen accounts is expected to rise. To reactivate a frozen account, the customer must complete the data update and visit the branch in person to request reactivation.

The frequency of required updates depends on the customer's risk classification. High-risk customers must update their information annually, medium-risk every two years, and low-risk every three years. Each bank determines its own warning period, but many follow a standard two-week process, during which multiple reminders are issued before taking action.

Incentives and Fee Waivers

To encourage customer compliance, the Central Bank has instructed banks to eliminate fees associated with updating customer information. This includes removing the KD 5 fee previously charged at bank branches and canceling any fees associated with online updates. Additionally, banks have been directed to stop deducting the KD 2 monthly charge from dormant accounts with balances below KD 100.

KYC and Verification Measures

As part of the “Know Your Customer” (KYC) process, customers are required to update key personal information, including civil ID details, nationality changes, addresses, and income sources. Banks are authorized to verify this information using reliable sources and original documentation to ensure accuracy and compliance with financial regulations.

AML/CTF Compliance

The CBK’s latest directive is aligned with its broader objective of enhancing the financial sector’s resilience against money laundering and terrorism financing. Banks are now required to implement stricter protocols for identifying customer risk levels and to establish clear guidelines and timelines for data updates and reactivation of frozen accounts. These efforts are part of Kuwait’s commitment to international financial standards and regulatory best practices.

Financial Market Update

Separately, the Central Bank of Kuwait announced the allocation of its latest bond and tawarruq issuance, amounting to KD 200 million for a three-month term, offering a return rate of 4.125 percent. This reflects ongoing efforts to manage liquidity and provide stable investment opportunities within the financial sector.

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