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KUWAIT CITY: Kuwaiti authorities reached a provisional agreement yesterday requiring the government to buy out billions of dollars of bank loans owed by citizens and reschedule them interest free.
Finance Minister Mustafa Al Shamali (Pictured) said after a meeting with parliament’s financial and economic affairs committee that “an agreement on the issue has been reached”. He said it will be finalised next week after a technical-legal team studies the required details.
Committee chairman Yussef Al Zalzalah said the deal requires the government to buy all bank loans taken out by Kuwaiti citizens between January 1, 2002, and March 30, 2008. MPs have claimed that local banks violated lending rules during the period by charging higher interest and the central bank failed to apply the law on them.
The government will then waive all interest on the loans and reschedule repayment in easy installments that must not exceed 40 percent of borrowers’ monthly income, Zalzalah said. Committee secretary Safa Al Hashem said around 66,000 debtors will benefit.