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ABK Raises Awareness on Risks of Loan Encashment

31 January 2022

ABK Raises Awareness on Risks of Loan Encashment

As part of the Bank’s ongoing commitment to enhance customers’ financial knowledge, Al Ahli Bank of Kuwait (ABK) raises awareness of the risks associated with loan encashment. The initiative is part of ‘Let’s Be Aware’, a campaign orchestrated by The Central Bank of Kuwait (CBK) and Kuwait Banking Association (KBA).

Mr. Mahmoud Ahmed Assad, Head of Retail Lending at ABK, said: “Consumers resort to loan encashment to overcome their debts sometimes without acknowledging the consequences. This may expose consumers to a new stream of arrears that exceeds their financial limits. In addition, loan encashment can lead to serious legal retribution and is considered a violation of transparency and accountability.”

Furthermore, threats associated with loan encashment could lead to imprisonment due to presenting forged documents, countersigning data, or the inability to pay liabilities. As such, CBK regulates financial institutions in Kuwait to provide tailored counselling to consumers and assess their liabilities, permitting them to avail banking products within their means.

Individuals need to contact their financial institution to discuss personal liabilities and current financial conditions during tough times. Additionally, consumers are encouraged to reconsider activities that cause financial distress, legal jeopardy and adversely impact the national economy.

The ‘Let’s Be Aware’ campaign brings together regulators and financial service providers in Kuwait, spearheading a joint effort to raise consumer awareness of banking products and services as well as other crucial topics such as effective bank card usage, guidance on borrowing, complaints and escalation methods, fraud management, cybersecurity protocols, and more.

For more information about ‘Let’s Be Aware’, visit the campaign’s official website at www.dirayakw.com or visit eahli.com.