The Central Bank of Kuwait (CBK) has introduced new accounting and disclosure requirements for electronic payment service providers, electronic contract service providers and electronic payment system operators, as part of broader measures to improve transparency in the financial statements of these entities.
Reclassification of partners' accounts
Under the new requirements, partners' current accounts must no longer be included within total partners' equity. The CBK stated that such accounts can contain transactions with the characteristics of assets, liabilities or equity, meaning their classification under equity alone is inappropriate.
Instead, paid-up capital, reserves, retained earnings and other specified items will be classified under partners' equity, with the equity statement reflecting changes that occur during the relevant financial period.
Funds provided by partners to support capital or business activity will be treated according to their repayment terms. Where a repayment date has been agreed, the funds must be shown separately under liabilities, with disclosure of their nature, balances and conditions. Funds provided without a specified repayment date will instead be presented separately under partners' equity, along with details of their nature and conditions. Withdrawals or short-term obligations linked to partners reclaiming their funds must be shown separately under assets, together with the nature of the balances and their repayment dates.
The CBK has also directed that agendas for ordinary and extraordinary general assemblies be submitted to the bank for prior approval before meetings take place.
Procedures to freeze customer funds
Separately, the CBK has set out procedures for exchange companies, electronic payment service providers, electronic contract service providers and electronic payment system operators participating in a virtual central chamber established to combat electronic financial fraud.
Under these procedures, the entities concerned must establish dedicated institutional email addresses to receive correspondence from judicial authorities affiliated with Kuwait's Ministry of Justice, including requests to freeze or seize customer funds or disclose account balances. Entities are also required to allocate email channels specifically for such notifications and to activate notification features on the designated addresses.
The virtual chamber is described by the CBK as a sovereign operational system for handling electronic financial fraud, linking banking supervision with security and judicial authorities under Kuwait's Ministry of Interior and the Public Prosecution.
Regulatory context
The measures come as fraud methods targeting customers increasingly include fake communications, fraudulent data-update links, misleading advertisements and false prize claims. By formalising reporting channels between payment entities and judicial authorities, and by tightening how partners' funds are classified and disclosed, the CBK aims to reduce ambiguity in financial statements and strengthen the coordination needed to act on fraud-related requests. The changes apply across Kuwait's electronic payment and e-contract service sector and reflect continued regulatory attention on the transparency and oversight of non-bank payment entities operating in the country.
