Kuwait Court of Cassation principle number 3204

The relationship between banks and their customers. Subject to the principle of autonomy of the will. Its implication: permissibility of agreeing, in contracts concluded between them, on the interest rate applicable to loans granted by banks to them. The condition for this: - 627 - Loan The rate must not exceed the rates announced by the Central Bank. Their agreement on interest exceeding these rates. It must be reduced to the rates announced on the date of the agreement. Agreement in these contracts authorizing banks to raise the agreed interest rate without renewed customer consent. A permission granted to the bank. There is no violation therein. Absence of an express agreement to that effect in the contract. Its effect. Central Bank decisions adjusting the interest rate have no retroactive effect on what was agreed before them. - The bank's entitlement to raise the interest rate. Its basis. The common will of the bank and the customer to accept the new rate, upward and downward, so long as it is within the rate announced by the Central Bank.