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Collateral stock rules unchanged- Kuwait
Kuwaiti banks will still face penalties if they liquidate stocks held as collateral against customer loans, the central bank said on Sunday, refuting a media report.
- Reuters
- Published: 23:51 December 21, 2008
Kuwait: Kuwaiti banks will still face penalties if they liquidate stocks held as collateral against customer loans, the central bank said on Sunday, refuting a media report.
Al-Qabas newspaper said yesterday that banks have been liquid-ating stocks in line with a central bank circular.
"What is being reported, the rumours on this issue, is completely untrue," Central Bank Governor Shaikh Salem Abdul Aziz Al Sabah was quoted by state news agency KUNA.
Shaikh Salem said the central bank's policy on the issue remained unchanged from October when introduced rules to punish banks that cash in the portfolios of debtors.
Banks can only liquidate mortgaged stocks on orders from the customer or if a debtor was not cooperating with lenders, Shaikh Salem told KUNA.
Kuwait's bourse fell as much as 3.27 per cent yesterday before closing down 2.66 per cent.
One analyst said that the decline was not in reaction to the rumour but on worries about how the financial sector is faring.
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