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Kuwait Banks Eliminate Salary Limit for Account Opening

  • Publish date: Friday، 31 January 2025
Kuwait Banks Eliminate Salary Limit for Account Opening

In a move that will make banking services more accessible to everyone, the Central Bank of Kuwait has instructed local banks to open accounts for all customer segments, including low-income individuals, job holders, service workers, craft workers, and domestic workers. This directive, reported by Al-Rai, removes the minimum salary requirement for opening bank accounts, making it easier for middle and low-income individuals to access banking services across Kuwait.

Simplified Procedures for Account Opening

Previously, many banks in Kuwait required a minimum salary to open a bank account. However, the Central Bank’s new regulations mandate that banks no longer refuse to open accounts based on salary or income barriers. This means people from various income groups, including those who traditionally faced challenges in accessing banking services, can now open accounts with ease.

The directive also calls for simplified procedures, ensuring that banks must streamline the account opening process for all customer segments. This change aligns with the Central Bank’s ongoing commitment to enhancing financial inclusion, making sure that financial services are accessible to everyone, regardless of their income level.

A Move Toward Financial Inclusion

The removal of the minimum salary requirement is a significant step toward greater financial inclusion. The Central Bank sees this as an important measure to ensure that all segments of society, including domestic workers, can access essential banking services. By making it easier to open accounts, individuals will be able to manage their finances more effectively, access financing options, and securely store their funds.

According to the Central Bank, restricting access to bank accounts for certain groups of people keeps them outside of the formal banking system. This can result in missed opportunities for accessing affordable financial products and services. The Central Bank emphasizes that simplifying the process for opening low-value and low-cost bank accounts will support broader policies aimed at promoting digital payments across the country.

Kuwait Banks Eliminate Salary Limit for Account Opening

Boosting Access for Domestic Workers

The importance of this directive is further underscored by the fact that domestic workers make up a significant portion of Kuwait’s workforce. By the end of the first half of 2024, domestic workers accounted for 26.9% of Kuwait’s total workforce, roughly 786,380 individuals. They represent 31.8% of the expatriate workforce, highlighting a large demographic that will benefit from the new regulations.

A Gateway to Better Opportunities

The ability to open a bank account is a critical first step in accessing a wider range of financial services. For many, having a transaction account provides the opportunity to store money, send payments, and receive funds. This is often the gateway to additional services like money transfers or credit, which can improve an individual’s financial well-being.

By removing barriers to account opening, the Central Bank aims to make it easier for low- and middle-income individuals to manage their money and take advantage of financial services. This is expected to encourage broader adoption of financial tools, ultimately improving quality of life for many.

Moving Forward with Lending and Small Deposits

The facilitation measures introduced by the Central Bank also go beyond just account opening. The directive includes lending and small deposits, ensuring that individuals from all walks of life can access various financial services. By making these services more accessible, the Central Bank hopes to provide better opportunities for individuals to utilize their finances effectively.

However, the sources clarified that banks will not actively market accounts for low-income groups. While these accounts will be opened upon request, banks will not seek to attract this customer segment due to the operational pressures these accounts can place on banking systems. Additionally, these accounts are not expected to generate significant benefits for banks, as the deposits are often withdrawn immediately after being made.

Kuwait Banks Eliminate Salary Limit for Account Opening

Financial Inclusion for Small and Medium Enterprises

The Central Bank’s focus on financial inclusion extends beyond individuals to include businesses, especially small and medium-sized enterprises (SMEs). The regulatory body is actively working to ensure that banks provide accessible services to this important segment of the economy. Furthermore, the Central Bank is developing policies that encourage the use of modern financial technologies to reduce operational costs and make it easier for banks to engage with low-income customers.

Looking Ahead: A Step Toward Financial Empowerment

The Central Bank of Kuwait’s removal of the minimum salary requirement for opening bank accounts marks a significant milestone in the country's journey toward financial inclusion. By making banking services accessible to all, regardless of income, Kuwait is paving the way for greater financial empowerment and economic opportunities for all segments of society.

This move reflects the regulatory body’s commitment to ensuring that everyone, from domestic workers to small business owners, can participate in the formal banking system. It also supports the broader goal of promoting digital payments, which is becoming increasingly important in the global financial landscape.

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