The Central Bank of Kuwait (CBK) has directed all local banks to intensify due diligence by requiring timely Know Your Customer (KYC) updates and implementing close monitoring of customer account activity. This directive is part of Kuwait’s broader plan to fortify anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks.

Banks must proactively identify and mitigate risks by ensuring all customers have up-to-date information. Non-compliance will result in disciplinary actions, including account freezes.

To ensure widespread awareness, banks have been instructed to notify customers via SMS, app alerts, emails, ATMs, and call centers. Customers will typically receive three reminders at five-day intervals before facing an account freeze.

Increased regulatory oversight means leniency will no longer be afforded to those delaying KYC compliance. Accounts not updated within the set timeline will be frozen. To reactivate a frozen account, the customer must complete the required updates and visit the bank branch in person.

The CBK has classified customers based on risk levels, requiring data updates on the following schedule:

• High-risk: Annually
• Medium-risk: Every two years
• Low-risk: Every three years

Banks typically follow a two-week warning process before freezing accounts, with reminders issued throughout the period.

To motivate customers, the CBK has removed fees associated with the update process. This includes:

• Eliminating the KD 5 branch update fee
• Waiving online update charges
• Canceling the KD 2 monthly deduction from dormant accounts with balances under KD 100

These measures aim to make it easier for customers to comply without financial burden.

As part of the enhanced KYC process, customers must update key personal information, including:

• Civil ID details
• Nationality and address changes
• Income sources

Banks are authorized to verify all submitted information using original documents and trusted sources to ensure accuracy and compliance.

The CBK’s directive is consistent with international financial standards, reinforcing Kuwait’s commitment to combating financial crimes. Banks must establish customer risk profiles, set clear guidelines, and define reactivation procedures to strengthen compliance.

This policy is part of the national financial strategy that aligns with FATF recommendations on AML/CTF, ensuring that Kuwait remains an active player in the global financial ecosystem.

In a related development, the Central Bank of Kuwait announced the allocation of KD 200 million in its latest bond and tawarruq issuance, offering a 4.125% return over three months. This move supports liquidity management and provides secure investment options within Kuwait’s financial market.