Central Bank holds ultimate control over supervision of bank raffles, according to MCI
Central Bank of Kuwait Takes Charge of Bank Prize Draws
The Central Bank of Kuwait has been confirmed as the regulatory body for bank prize draws in the country, following a series of legal affirmations. This authority is based on Law No. 32 of 1968, which vests the Central Bank with exclusive power over all banking-related activities, including prize draws conducted by banks.
In practice, banks such as the National Bank of Kuwait (NBK) run prize draws like the Al Jawhara Account draws. These draws are overseen by a representative from the Ministry of Commerce & Industry to ensure compliance and transparency, in addition to the Central Bank's regulatory oversight.
The Central Bank's role in bank prize draws encompasses ensuring liquidity, solvency, and adherence to fair promotional standards. The ministry, on the other hand, regulates promotional activities by non-bank commercial entities, including licensing, monitoring compliance, preventing consumer deception, and enforcing transparency in advertising and offers.
Prize draw rules typically include conditions such as minimum account balance maintenance and non-withdrawal periods to qualify for entry or increased chances. The Central Bank ensures that these rules are fair and transparent, while the Ministry of Commerce & Industry verifies their implementation during the draw process.
The dispute over which body regulates bank prize draws has been resolved, with Minister of Commerce and Industry Khalifa Al-Ajeel confirming that the Central Bank of Kuwait regulates bank prize draws. This confirmation comes in a letter from Minister Al-Ajeel.
The Central Bank's jurisdiction over bank prize draws does not extend to non-bank promotional activities, which remain under the Commerce Ministry's jurisdiction. The ministry's regulations for non-bank prize draws are based on Commercial Law No. 68 of 1980, Consumer Protection Law No. 39 of 2014, and other relevant statutes.
Following this clarification, the Commerce Ministry will no longer respond to banks' inquiries regarding the regulation or resumption of prize draws. This move underscores the clear distinction between the regulatory oversight of banks' prize draws, under the Central Bank, and non-bank prize draws, under the Commerce Ministry.
In summary, the regulatory framework for bank prize draws in Kuwait is anchored in the Central Bank’s authority as per Law No. 32 of 1968, with operational oversight often supported by the Ministry of Commerce & Industry during actual draws. The Central Bank ensures liquidity, solvency, and adherence to fair promotional standards in bank prize draws, while the Ministry of Commerce & Industry regulates promotional activities by non-bank commercial entities.
The Central Bank of Kuwait ensures the financial aspect of bank prize draws, using their power given by Law No. 32 of 1968 to regulate all banking-related activities.
Businesses, including banks, are expected to comply with the fair promotional standards set by the Central Bank for their prize draws to maintain transparency and consumer trust.
