Kuwaiti parliament approves establishment of foreign banks

The Kuwaiti Ummah council ( parliament) yesterday approved a law permiting foreign banks to work in Kuwait, for the first time in the history of the country.

In a step that falls in the course of a new government's policy aiming at attracting more foreign investments. Some 24 parliamentarians approved the law, while it was apposed by 18, and one refrained from voting.

The new law states to amend the law issued in 1968, so as the Kuwaiti Central Bank would be permitted to grant licenses for foreign banks to work in Kuwait, under the condition that many of its employees to be Kuwaiti citizens. The law gives foreign banks a grace period of three years, before the number of its Kuwaiti employees reach fifty percent of the total number of employees.

Islamic parliamentarians failed in their attempt to impose adopting Islamic banking principles on foreign banks.

Initially, the bank approved in the mid of December 2003 the draft bill. By the end of 2003, the government revived a law permitin complete ownership of companies by foreign investors.

Kuwait hopes to revitalize the private sector, and attract investments at billions of dollars, especially after the toppling of the former Iraqi President Saddam Hussein.

On the other hand, the Central Bank of Kuwait announced initial consent for the request of the "Kuwait general commission for investment" to found a bank working according to the rules of the Islamic Sharia in what is known as Islamic banking.