16 August, 2010No approval for Iranian, Iraqi banks
The Central Bank of Kuwait has reportedly rejected bids from four Iranian banks and one Iraqi one to launch branches in Kuwait after they failed to meet the necessary criteria. According to a local banking insider, the five whose bids were turned down are not major banks either in their own countries of origin or internationally.
While the CB was studying the banks' financial status after they filed applications for licenses to open branches in Kuwait, it discovered that they "lack a sufficiently sound financial base that would qualify them to obtain these licenses," the bank official explained.
Speaking to Al-Rai on condition of anonymity, the banking insider explained, "After it allowed foreign banks to operate in Kuwait, the CB decided to introduce controls to ensure that these banks would have the necessary sufficient experience in foreign banking operations.
The official conceded that there was a strong element of realpolitik motivating the decision to turn these banks down, with their financial weakness providing the nominal justification for rejecting their license applications.
Political stability is a primary component of banking work, with a lack of political stability increasing the level of threat to the safety of customers' deposits," the banking insider added.
Kuwait Times
