Kuwait’s central bank rejects bids from four Iranian and one Iraqi banks to open branches

August 16, 2010
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Kuwait’s central bank has reportedly rejected bids from four Iranian and one Iraqi banks to open branches in Kuwait after they failed to meet the required criteria, a local daily said.

According to a local banking insider, the five whose bids were turned down are not major banks either in their own countries or internationally, Kuwait Times reported.

While looking at the banks’ financial status after they filed applications for branches in Kuwait, the central bank discovered that they “lack a sufficiently sound financial base that would qualify them to obtain licenses,” the bank official said.

“After its decision to allow foreign banks to operate in Kuwait, the central bank decided to introduce controls to ensure that these banks will have the necessary sufficient experience in foreign banking operations,” the insider was quoted as saying.

However, the official said that there was a strong element of realpolitik behind the decision to turn these banks down, while their financial weakness provided the nominal justification for rejecting their license applications.

“Political stability is a primary component of banking, and a lack of political stability increases the level of threat to the safety of customers’ deposits,” the insider said.

         

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About the author

Born August 3, 1960 in Monastir, Tunisia
Career
Media career:
  • ABC News (Tunisia)
  • Bahrain Tribune
  • Gulf News
  • Bahrain Television News
Teaching career:
  • Monastir (Tunisia)
  • University of Bahrain
Education
  • MA  Mass Communications, University of Leicester
  • BA  in English & US literature and studies, University of Tunis

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