Loans

Terms & Conditions

First Party: ABK
Second Party: Customer

The customer undertakes not to use the loan amount for any purpose other than the purpose for which the loan is provided, and to provide the documents supporting the use of the loan during the 8 months period subsequent to depositing the housing loan in his/her account. The customer acknowledges that in the event he/she fails to submit the above-mentioned documents, he/she will be considered in default under the provisions of this contract, and the provisions of section 8(c) shall apply to him/her.

Interest Rate and Method of Payment
1. Consumer Loans
  The interest rate shall apply to the full amount of the loan for the term of this contract and until the full settlement of all amounts due to the First Party under the contract.
  The Second Party undertakes to settle all loan amount including interests thereon in equal consecutive monthly installments.
2. Housing Loans
  The interest rate shall apply to the full amount of the loan during the term of this contract and until the full settlement of all amounts due to the First Party under the contract.
  
  The Second Party undertakes to settle the full amount including the interest thereon in equal consecutive monthly installments.
  
  If the First Party decides to amend the interest rate, the amended interest rate be equivalent to the declared interest rate of the Central Bank of Kuwait at that time, provided that such amended rate must not differ by more than 2% (by decrease or increase) from the agreed upon rate under this contract, and that the amendment is only applicable starting the 61st (sixty first) installment and the 121st (one hundred and twenty first) installment.
  
  Recording the new rate in the event of a change of the interest rate, in the account of the Second Party is binding on this Second Party and considered as a notice to him of the new applicable rate, provided that any increase or decrease of the interest rate will not have an effect on the number of installments which will remain fixed, only the installment amount will increase or decrease with the change of the interest rate at the beginning of each period provided for in this section.
The second party undertakes to repay the debit balance in addition to the due interests, fees, commissions and expenses (As per CBK list of charges and fees) on their due dates, free and clear of any taxes, duties, assessments or charges of whatsoever nature, reason or by whomsoever imposed, whether currently in effect or to imposed in the future.
The Second Party undertakes, in the event it is late in the payment of any installment on the specific date for payment, to pay a delay penalty calculated according to the rules, regulations and commissions applicable at the First Party and approved by the Central Bank of Kuwait.
The Second Party undertakes to transfer its salary and/or its fixed income to the account provided for in its above mentioned loan application, and that it continues to transfer its salary or its fixed income to this account until the full payment of the amount of the loan, its interest and its ancillary sums.

The Second Party undertakes also to transfer its end of service indemnities to the same above mentioned account. The First Party may deduct these indemnities from the remaining balance of the loan amount even if the installments are not due, without the need to send any notice or warning.
The First Party may, when any amount or accumulated monthly salaries or vacation indemnities are transferred to the above mentioned account to deduct in advance therefrom, the loan installments, even if not due yet.
The remaining balance or the full amount become due in one installment without the need for a notice, a warning or any other legal proceeding in the following situations:
1. The default of payment of any of the installment on its due date, or in the event there is not a sufficient balance in the account of the Second Party to pay any amount due under this contract.
2. If the salary/invoice of the Second Party stops being transferred to the Second Party’s account for any reason.
3. If it appears, at any time, that the information or documents submitted by the Second Party to obtain the loan are not true or if it appears that the loan has been used for a purpose other than the purpose provided for in this contract. In the event of any of the above mentioned defaults, or if the Second Party fails to fulfill any of its commitments provided for in this contract, the First Party may apply delay penalties on the amounts due under this contract. The delay penalties will be calculated based on the higher of the maximum contractual interest determined by the Central Bank of Kuwait or the 54 maximum interest rate under this contract.
The Second Party represents that:
1. All the accounts currently opened or that will be opened in the future in any of the First Party’s branches inside or outside of Kuwait are guaranteeing one another. The First Party may consolidate all of these accounts or part of these accounts and deduct the remaining balance of the loan and the interest and all ancillary sums from the positive balance of any of these accounts.
2. All the monies, the commercial papers, precious metals and all other things currently deposited or which will be deposited in the future, will be considered as part of the possessory pledge to guarantee the settlement of all obligations of the Second Party under this contract to the benefit of the First Party. The First Party may set off its dues against the above mentioned items In the event the Second Party receives an additional income other than those declared to the First Party, the Second Party hereby waives all its rights in this additional income and declares this additional income as an additional guarantee to the settlement of the loan. The Second Party agrees to notify the First Party of all additional current income sources, and undertakes to notify the First Party of any changes in these income sources.
3. The customer acknowledges that the loan amount will not be used for Money Laundering or Terrorism Financing activities. The customer declares to abide by the laws and regulations regarding Anti Money Laundering and combating the financing of terrorism in addition to any other financial crimes.
The Second Party agrees that the First Party’s books and records are accurate and are considered as conclusive evidence on the amounts due under this contract. The Second Party may not object to their accuracy in any way whatsoever. The Second Party waives the right to request the audit the First Party’s books and records related to these obligations from courts, unless the Second Party proves that these books and records are not accurate.

In the event the Second Party does not receive a written objection on the account statement within 15 days of sending the account statement via regular mail or e-mail or any other electronic mean, the First Party is deemed to acknowledge the accuracy of the account statement, and to irrevocably agree to its records and content.

In the event the Second Party does not receive the account statement within 15 days of sending the account statement, and that the Second Party does not request the account statement within a week of the same date, the Second Party may not object to not receiving the account statement and may not object to its records and content.
Any tolerance or extension of the term of this contract by the First Party may not affect the enforceability of all terms and provisions of this contract on the Second Party. This tolerance or extension may not be considered as waiver of any of the rights of the First Party whatsoever.
The Second Party may not assign its obligations under this contract without the prior written approval of the First Party. The First Party may wholly or partially assign its rights under this contract without the Second Party’s approval.
The Second Party undertakes that, in the event he retires or in case of payment of cash in lieu of retirement benefits, to transfer this cash agreed upon with the public institution for social security to his account with the First Party, who will be allowed to deduct therefrom the installments’ balance provided to the Second Party pursuant to this contract and the interests even if the installments are not due yet.
The Second Party authorizes, pursuant to this contract, by a final irrevocable authorization, the First Party to exchange information about the Second Party with other banking institutions and with any other party to the centralized risk system. The Second Party authorizes the First Party to inquire about the credit cards, data, or other consumer or housing loans provided to the Second Party by other financial and investment institutions or banks, pursuant to the banking regulations and without any responsibility whatsoever on the First Party.
The Second Party represents that the current liabilities that he/she disclosed in the loan application provided to the First Party represents only his/her commitments towards the different financial institutions exclusively, excluding any other undisclosed commitment or any commitment not provided in the credit information network.

In the event it is revealed to the First Party that the information provided by the Second Party is incorrect, the First Party may consider that the Second Party is in default under Section 7(c) of this contract.
The Second Party agrees that the First Party is allowed to deduct the installments directly from his salary with the employer of the Second Party, or from the account to which this salary is transferred. The Second Party authorizes the First Party with an irrevocable and final authorization to communicate in this respect with the employer of the Second Party or the Party to which the salary of the Second Party is transferred, and to initiate all the necessary procedures. This authorization remains valid and effective until the settlement of the complete amount the ancillary sums.
The Second Party represents that the aggregate monthly liabilities of the Second Party under this contract with all the parties mentioned in the loan application, which is deemed as an integral part of this contract, including its liabilities towards the First Party do not exceed 30%-40% of his net salary after all applicable deductions or of his income. The Second Party also represents that his consumer loans do not exceed 25 times the monthly salary or do not exceed KD 25,000 and that the total amount of the consumer and housing loans do not exceed KD 95,000, and he represents that his debt will never exceed these amounts. The Second Party represents that he will transfer to the First Party the cash in lieu of retirement benefits obtained from the public institution of social security and the First Party is allowed to deduct the installments from these amounts.
The Second Party agrees that all the communication, legal notices sent by the First Party to the address provided for in this contract, to his e-mail address, or the last address notified to the First Party, by registered mail with acknowledgment of receipt, are deemed true and valid and enforceable on the Second Party.
Politically Exposed Person (PEP): any natural person, whether as customer or beneficial owner, who is or was entrusted with a prominent public function in the State of Kuwait or in a foreign country, such as Head of States or of governments, senior politicians, senior government, judicial or military officials (colonel rank and above), senior executives of state owned corporations, and important political party officials. The definition also includes any person who is or has been entrusted with a prominent function in an international organization, such as directors, deputy directors and members of the board. This term also includes up to second degree family members and close associates.
This contract is governed by the Kuwaiti commercial law and the parties submit to the exclusive jurisdiction of the Kuwaiti courts. Both parties agree to the submit to the jurisdiction of the local courts of the capital.

The contract has been executed in as many copies as there are parties to this contract. The execution of a party of this contract constitutes a conclusive evidence of receiving a copy of this contract to act accordingly.