Kuwait to bail out banks

Kuwaiti authorities are said to have reached a provisional agreement under which its Government will buy out billions of dollars of bank loans and reschedule them interest free. Kuwait’s Finance Minister Mustafa al-Shamali recently told reporters that an agreement had been reached and the deal would be finalised next week. Committee Chairman, Yussef al-Zalzalah, reportedly said the deal requires the Government to buy all bank loans taken out by Kuwaiti citizens between 1 January 2002 and 30 March 2008, according to news agency AFP. The news agency reported that MPs claim 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 waive all interest on the loans and reschedule repayment in easy installments “that must not exceed 40 per cent of borrowers' monthly income,” Zalzalah is quoted as saying. The process is estimated to cost around $3.2 billion, reported AFP, citing Committee Member Ahmad Lari. Committee Secretary Safa al-Hashem is quoted as saying around 66,000 debtors will benefit. MPs have also proposed that Kuwaitis who does not benefit from the debt relief scheme should be given a grant of $3500.  Albawaba Business