The Central Bank of Kuwait (CBK) has issued strict directives prohibiting the safekeeping and storage of any bank cash with third parties, ordering local banks to ensure that all liquidity remains under their direct control and within premises fully managed and supervised by them.
The move comes after repeated discoveries of large quantities of cash stored in unlicensed locations, later found to belong to money transport companies not authorized to carry out such activities, raising serious operational, security and legal risks, as well as concerns over overlapping responsibilities.
According to official data, the value of ATM transactions reached 6.835 billion dinars by the end of last September, accounting for 19.9 percent of total card transactions, with around 2,400 ATMs operating across Kuwait.
Traditionally, excess liquidity was temporarily held by cash transport companies for up to 24 hours before being absorbed by branches and ATMs — a practice now firmly rejected by the regulator.
Sources told Al-Rai that the CBK directive aims to strengthen the resilience and safety of the banking sector, in line with best supervisory practices and international standards for cash and liquidity management.
The Central Bank stressed that banks bear full responsibility for the protection, control and insurance of their monetary assets.
The directive requires banks to immediately review their current arrangements, take corrective measures without delay, and provide the CBK with any information or reports requested. Compliance will be monitored through inspection and supervisory activities.
Four Pillars of the New Framework
Security Control Requirements — Banks must provide integrated 24/7 security monitoring systems, access control based on authorization, alarm systems and fire protection, in line with approved international standards. Clear separation of duties is required to reduce operational and internal risks.
Approved Operational Procedures — Banks must adopt written, senior-management-approved policies documenting the full cash cycle from receipt to delivery, applying double audit principles, internal controls and maintaining accurate, auditable records.
Business Continuity Planning — Each bank must prepare and implement an approved business continuity plan, identify alternative locations, and conduct periodic testing to ensure uninterrupted services.
Emergency and Crisis Management Plans — Banks are required to maintain crisis plans covering natural disasters, technical failures and security incidents, with clear escalation procedures and regular staff training.
The CBK stressed that the new mechanism must guarantee uninterrupted flow of cash to branches and ATMs, standardize transport mechanisms, and apply the highest efficiency and security standards. Banks must also strictly adhere to regulations governing their dealings with licensed cash transport companies.
Bank officials are currently examining the technical and operational requirements to comply with the new rules, most notably opening each bank’s main vault 24 hours a day to meet ATM replenishment needs.
Sources noted that cheque settlements currently run until 7:45 pm, while interbank transfer settlements extend to 11:45 pm.
Under the new framework, each bank will establish a cash center capable of providing withdrawal liquidity throughout the day, ensuring that no bank funds remain outside official vaults overnight.
