Marking a milestone, Gulf Bank secures CBK's initial approval to convert into Islamic bank

20/08/2025 06:09 AST

Gulf Bank stated that CBK's Board of Directors has decided on 18/8/2025 to issue its Initial Approval on the conversion of Gulf Bank to a Bank compliant with Islamic Sharia, as per law No (32) of the year 1968 concerning currency, the Central Bank of Kuwait, and the organization of banking business. That decision came following the results of the feasibility study on the conversion of Gulf Bank submitted by the international consultant, as well as the submission of multiple technical and legal requirements by Gulf Bank.

In a disclosure published on the stock exchange website, Gulf Bank stated that the initial approval issued by the Central Bank of Kuwait, valid for one year as of this date, is subject to a specific technical, legal, and operational requirement, which are as follows:

1. The Bank shall ensure, during the initial approval period of one year, finalizing all regulatory and operational requirements for the conversion. Once completed, the Bank shall request CBK's approval to move forward with completing the Islamic conversion process in accordance with provisions of the Companies Law. In the event of non-compliance, this approval shall be deemed cancelled.

2. The need to submit a request to CBK to obtain its approval for the Advisory Bodies whom the Bank will engage with.

3. Providing CBK, by end of December 2025 with a conclusive report on elements of the existing activities prior to conversion which will be carried over by the Bank post-conversion, and the timeline to terminate these activities.

4. Submit a request to CBK to obtain a prior approval for the offered services and products according to provisions of the Islamic Sharia.

5. The need for the Sharia advisors to have a role in pursuing verification of the conversion of the Bank's existing products and services to Sharia-compliant products and services as part of the Conversion Process Steering Committee, and to obtain CBK's approval on the advisors who will be assigned for this purpose.

6. Refrain from practicing any activities in accordance with the provisions of Islamic Sharia during the coming period until the Bank is registered in the Islamic Banks' Registry at the CBK.

7. Hiring the necessary staff based on the Bank's needs after the Islamic Sharia conversion, in addition to training and qualifying existing staff.

8. Fulfilling all operational requirements such as operating systems, policies and procedures, as well as taking into account CBK's requirements in this regard.

9. Providing CBK with detailed monthly reports, as of 30/9/2025, showing the expected start and completing dates of the conversion requirements within the above prescribed period (one year as of this date), in addition to indicating the relative significance of each task or procedure to the overall tasks.

10. Prepare a conservative scenario for the capital adequacy ratio which indicates that the Bank did not benefit from the adjustment factor "Alpha".

In this context, Ahmad Mohammad Al-Bahar, Chairman of the Board, stated: "At Gulf Bank, we envisage this historic step as a pivotal milestone in the Bank's journey. We are fully committed to fulfilling all regulatory and technical requirements to ensure successful and gradual transformation into a Bank operating in accordance with the principles of Islamic Sharia".

Al-Bahar also extended his thanks to the Central Bank of Kuwait for their continued cooperation and support, stressing that this preliminary approval represents a strong incentive to move forward with the transformation process in a way that fulfills the Bank's objectives and contributes to strengthening the national economy. Gulf Bank affirms its commitment to all applicable laws and regulations, including obtaining any approvals that may be required from the regulatory authorities, in order to commence the conversion of Gulf Bank to a Bank compliant with Islamic Sharia. The Bank will also disclose any material developments in this regard in due course.

Kuwait Times