CBK to Accept Digital Bank Applications Until End of June 2022
The Central Bank of Kuwait (CBK) issued comprehensive guidelines specifying requirements for establishing digital banks. CBK also published the form for digital bank applications and plans to accept applications until June 30, 2022, with initial approval expected to be granted by year-end.
The guidelines have five parts covering the:
- Definition of digital banks
- Legal framework for digital banks
- Licensed activities
- Phases and procedures for establishment of digital banks as per the published application form
- Supervisory and regulatory instructions and controls
CBK has developed its digital banking framework after benchmarking regulatory approaches of 25 central banks studying use cases from 40 digital bank business models. As per the CBK Governor, the digital banks function within three main models: as a unit within a traditional bank; as an establishment of a standalone digital bank; or as a partnership between traditional bank and a digital institution, wherein the bank handles core banking operations while the digital institution handles relations with customers, trademark, and other areas of operation and service. The CBK Governor anticipates that digital banks will create added value through innovative business models geared to the service of the economy and the public good through targeted access and responsible use of innovative financial solutions, giving utmost care to the integrity and stability of the banking and financial system in the State of Kuwait.
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Keywords: Middle East and Africa, Kuwait, Banking, Digital Banks, Guidelines, Bank Licenses, Regtech, Fintech, Islamic Banking, CBK
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