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Kuwaiti Banks Seek Guidance on Monitoring Employee and Customer Accounts from Central Bank

Due DiligenceKuwaiti Banks Seek Guidance on Monitoring Employee and Customer Accounts from Central Bank

Local banks in Kuwait have sought guidance from the Central Bank of Kuwait regarding the necessary control mechanisms for banking operations involving employee accounts and customer accounts. The banks have asked the supervisory regulator for clarification on the procedures they should follow to monitor their employees’ accounts and whether the central bank has issued any specific directives in this regard.

In response, the Central Bank of Kuwait has emphasized the importance of banks fulfilling due diligence requirements to verify the integrity of funds and information in both employee and customer accounts. This verification involves comparing the financial data recorded in the Know Your Customer (KYC) form with the transactions executed in the accounts to ensure consistency.

The Central Bank has instructed banks to rely on its previously issued instructions, including those amended in February, which outline the frameworks and concepts banks must consider when establishing policies and procedures for monitoring both employee and customer accounts.

Banks in Kuwait are particularly vigilant when it comes to employee accounts, closely monitoring any unusual money flows into these accounts. If large sums of money are transferred into an employee’s account, the bank will inquire about the source of these funds and seek evidence of their legitimacy.

Additionally, Kuwaiti banks conduct comprehensive reviews of customer account opening documents, including thorough examinations of any negative records, before authorizing new accounts or processing financial transactions. They also scrutinize incoming fund transfers to customer accounts, especially those that exceed conventional financial thresholds, verifying the legitimacy of the sources of these funds.

These measures are part of the banks’ efforts to ensure compliance with regulatory requirements and maintain the integrity of the financial system

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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