The Central Bank of Kuwait has issued a circular requiring local banks to examine customer transactions over the prior six months upon identifying indicators of suspicious salary activity. Banks must compare the transactions against the employee’s typical financial patterns and verify any potential relationship with the employer or associated parties while documenting all findings. The instructions specify that workers should not face restrictions on accessing their funds based solely on initial suspicion. Al-Rai newspaper detailed the circular’s requirements including timelines for assessments and coordination with other government bodies.
Suspicious activity includes direct red flags such as employees returning salaries to employers without apparent legitimate reason or cases where employers hold worker bank cards and PIN codes. Additional triggers encompass repeated transfers or withdrawals of 80 percent or more of the salary within 72 hours if occurring in at least two of the last three pay cycles or shifting 50 percent or more directly to the employer or linked entities. Documented worker complaints about forced salary returns also prompt full reviews. The Public Authority for Manpower follows up on identified violations to enforce labor compliance.
Banks must complete an initial review within two days and report suspicions to the Financial Intelligence Unit by the end of that period where grounds are sufficient. A comprehensive examination should conclude within three additional days for detailed cases while urgent matters require immediate notification. These deadlines support timely intervention without disrupting routine banking operations. The Central Bank of Kuwait framed the measures as essential for aligning with international standards on financial oversight.
The circular forms part of Kuwait’s ongoing push to exit the Financial Action Task Force grey list through stronger controls on wage payments and transaction monitoring. In September the Central Bank of Kuwait launched the Kuwait Wage Payment System to establish a national platform for processing and overseeing private sector salaries via local banks according to an AGBI report published on September 29. The platform aims to enhance transparency reduce manual processes and facilitate data sharing between authorities including the Public Authority for Manpower.
Local banks have updated their monitoring systems to detect deviations from customer profiles more effectively under the new guidelines. The Central Bank of Kuwait has emphasized that personal accounts must not serve as conduits for business revenues which has led to investigations where transfers far exceed declared income levels. Such practices have previously prompted pledges from account holders to cease using personal accounts for commercial purposes.
Economists view the measures as reinforcing integration between financial regulators and labor authorities to curb fictitious employment arrangements. The Public Authority for Manpower maintains records on worker permits that banks can cross-reference during reviews. These steps build on earlier directives that have progressively tightened oversight of salary disbursements across the private sector.
