Kuwait Court of Cassation principle number 2835

The Central Bank. Its function. Establishing rules regulating the banking operations banks may undertake, including loans, whether as regards the maximum amount, the applicable interest rate, or repayment periods, according to changing economic circumstances. Its decisions in this regard apply only to what occurs from their effective date. Their provisions do not extend to contracts concluded by banks before that date, even if subsisting under the new decisions. The basis for this: Insofar as they do not exceed the ceiling set by the Central Bank as the maximum interest rate, they do not concern public policy. Its effect. Their inapplicability to the latter contracts. Its consequence: Loan installments - 526 - Obligation falling due after their issuance remain subject to the decisions under which they were contracted. Contravention thereof: Retroactive application of the decisions prohibited by law.