Challenger Banks Editor's Choice Middle East & Africa

Central Bank of Kuwait Open Applications for New Digital Banks in the Region

The Central Bank of Kuwait (CBK) has issued guidelines specifying requirements for establishing digital banks as tech-based business models are becoming increasingly vital within the banking and finance sector to support and enhance services offered to customers and contributing to overall economic growth. This falls within CBK’s overall effort to utilise the latest advancements to bolster financial stability, encourage innovation, and meet future economic needs.

The CBK Governor, Dr. Mohammad Y. Al-Hashel, stressed that guaranteeing the smooth operation of the banking business is among top CBK priorities, as mandated by the relevant law. As the banking industry undergoes transformation, new business models enable better and more accessible services to customers thanks to the immense potential of digital technology. Thus, the CBK was keen to develop a digital banking framework to enable and support digital banks. This was accomplished after benchmarking regulatory approaches of 25 central banks studying use cases from 40 digital bank business models.

The Governor added that digital banks function within three main models; as a unit within a traditional bank, or as a partnership between such bank and a digital institution where the bank handles core banking operations while the second party handles relations with customers, trademark, and other areas of operation and service. The third model is establishment of a standalone digital bank.

Dr. Al-Hashel stated that CBK issued comprehensive guidelines for establishing new digital banks, and has opened the application process. The CBK will receive and collect all completed application forms and documents as of the date of issue of the guidelines until 30-6-2022. During said period, the CBK shall reply to all queries it receives. The applications will be evaluated against specific objective criteria over a period of six months, and initial approval shall be granted by year-end.

The Governor added that the guidelines come in five parts covering the definition of digital banks, their legal framework, and licensed activities, as well as phases and procedures for the establishment of digital banks as per the application form available through the CBK website, and the supervisory and regulatory instructions and controls, also available through the website.

The Governor concluded that CBK 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.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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