Kuwait orders banks to keep all cash in vaults

Kuwait has taken another step in its bid to stem money laundering by telling banks to stop storing cash outside their vaults.

The Central Bank of Kuwait (CBK) is giving the country’s lenders until the end of 2026 to comply with the new instructions, which were published in local media last week.

The decision follows reports that authorities had found large sums of cash stashed with unauthorised companies and in risky, unmonitored locations.

Kuwait’s crackdown on laundering is part of its bid to have itself removed from the “grey list” of the Paris-based Financial Action Task Force.

The grey list identifies jurisdictions perceived as having weak measures to combat money laundering and terrorist financing.

According to the CBK instructions, banks must complete the regulatory, operational and supervisory requirements needed to keep and manage cash at their premises.

Cash must be kept exclusively at bank vaults and remain under the bank’s full and direct responsibility and supervision, in line with approved security, protection and control procedures.

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“Banks will not be permitted to store cash with any other party… the move is intended to reduce operational, security and legal risks associated with storing cash with third parties and eliminate overlaps in responsibility,” the Arabic-language daily Al-Rai said.

It said the CBK decision followed the discovery of cash belonging to money-transfer companies being held at locations not licenced for liquidity storage, including some sites that were not properly protected or authorised to conduct such activity.

Kuwait in August warned foreign residents that they face expulsion if found to be involved in unlicenced activity.

The Gulf state has shut down more than 73,000 companies in an anti-laundering drive, while new rules issued in July toughened jewellery transactions.

Kuwait was also reported last month to have suspended the issuing of new freelance business licences as part of a crackdown on abuse of commercial permits.