The Central Bank of Kuwait (CBK) has granted its initial approval for Gulf Bank to transition into a bank compliant with Islamic Sharia’a.

With total assets of Kd7.3bn ($23.8bn) as of 30 June 2025, Gulf Bank offers a diverse array of services through its network of over 50 branches and more than 300 ATMs across the country.

This decision, made by the CBK board of directors, follows a feasibility study conducted by an international consultant and the fulfilment of various technical and legal prerequisites by Gulf Bank.

Gulf Bank outlined that the initial approval, which is valid for one year, is contingent upon meeting specific technical, legal, and operational requirements.

These include the necessity for the bank to complete all regulatory and operational criteria for the conversion within the one-year timeframe.

Upon completion, Gulf Bank must seek further approval from the CBK to proceed with the Islamic conversion process in accordance with the Companies Law.

Failure to comply with these stipulations will result in the cancellation of the approval, stated CBK.

Additionally, Gulf Bank is required to submit a request to the CBK for approval of the advisory bodies it intends to engage.

By the end of this year, the bank must provide a report detailing the existing activities that will transition post-conversion, along with a timeline for the cessation of these activities.

The bank must also seek prior approval from the CBK for any services and products offered in line with Islamic Sharia’a.

Gulf Bank board chairman Ahmad Mohammad Al-Bahar said: “At Gulf Bank, we envisage this historic step as a pivotal milestone in the Bank’s journey.

“We are fully committed to fulfilling all regulatory and technical requirements to ensure successful and gradual transformation into a Bank operating in accordance with the principles of Islamic Sharia’a.”

Furthermore, Sharia’a advisors will play a crucial role in verifying the conversion of existing products and services to ensure compliance, and the bank must obtain CBK approval for the advisors appointed for this task.

During the interim period leading up to the registration in the Islamic Banks’ Registry at the CBK, Gulf Bank is prohibited from engaging in any activities that contravene Islamic Sharia’a.

The bank will also need to recruit additional staff as necessary following the conversion and provide training for existing personnel.

Operational requirements, including the establishment of appropriate systems, policies, and procedures, must be fulfilled in accordance with CBK guidelines.

Starting from 30 September 2025, Gulf Bank is obligated to submit detailed monthly reports outlining the anticipated timelines for completing the conversion requirements, along with the significance of each task.

Gulf Bank is also tasked with preparing a conservative scenario for its capital adequacy ratio, indicating that the bank has not benefited from the adjustment factor “Alpha”.