Kuwait's central bank clears Gulf Bank's full conversion to Islamic banking

Summary

• Kuwait's central bank approved Gulf Bank's full conversion to Sharia-compliant operations on November 4, 2026.
• The approval follows preliminary clearance issued on August 18, 2025, and completed regulatory and operational requirements.
• Gulf Bank's deposits, lending and portfolio shift to Sharia-compliant terms once it enters the Islamic banking register.

The latest

Gulf Bank has secured final approval from the Central Bank of Kuwait to convert entirely into a Sharia-compliant institution and proceed with the remaining conversion steps, according to a supplementary disclosure filed with Boursa Kuwait on November 4, 2026. The bank said it must still apply to be struck from the conventional banking register and listed in the Islamic banking register before it can operate as an Islamic lender.

Details

• The approval: Gulf Bank said the Central Bank of Kuwait granted its approval on November 4, 2026, covering both the full conversion to operating under Islamic Sharia provisions and the bank's continuation with the remaining conversion procedures. The disclosure was filed with Boursa Kuwait and signed by compliance manager Mohammed Jassim Al-Balushi.
• The sequence: The disclosure supplements an earlier statement of August 18, 2026, in which Gulf Bank said it had met all regulatory and operational requirements set out in the central bank's preliminary approval letter. That preliminary approval was issued on August 18, 2025, a full year before the bank reported compliance.
• The remaining step: Once the procedures are completed, Gulf Bank said it will submit a request to the Central Bank of Kuwait to remove it from the register of conventional banks and enter it into the register of Islamic banks. The bank did not state when that application would be filed.
• The restriction: Gulf Bank stated it may not begin conducting Islamic banking activities before it is formally entered into the Islamic banking register held by the central bank. The approval therefore authorizes the conversion process rather than an immediate change in how the bank does business.
• The capital base: The disclosure letterhead lists Gulf Bank's paid-up capital at 419,225,856.300 Kuwaiti dinars. The bank gave no figures on the size of the portfolio to be converted, nor on how many deposit or financing contracts would be restructured under Sharia-compliant terms.
• The commitments: Gulf Bank said it remains bound by all relevant laws, including obtaining any further approvals regulatory bodies may require, and pledged to disclose material developments on the conversion as they occur. No timetable for those disclosures was given.
• The coverage: Al-Jarida reported the approval on November 5, 2026 at 10:04, under a headline stating that the central bank had approved Gulf Bank's full conversion into an Islamic bank. The newspaper's account tracked the disclosure filed with the exchange.
• What changes: A move into the Islamic banking register reshapes the terms governing Gulf Bank's relationships with depositors and borrowers, replacing interest-based products with Sharia-compliant structures across the portfolio. The bank did not detail how existing contracts would be transitioned.

Background

Kuwait maintains two separate banking registers at the central bank, one for conventional lenders and one for Islamic banks, and a lender cannot operate under Islamic banking rules until it is formally moved between them.

Between the lines

The gap between the preliminary approval of August 18, 2025 and the bank's confirmation a year later that it had met the regulatory and operational requirements indicates the conversion turned on systems and compliance work rather than a single licensing decision. The explicit bar on starting Islamic banking activity before registration suggests the central bank is keeping the operational switch under its own timing.

What's next

Watch for Gulf Bank's application to be struck from the conventional register and entered into the Islamic banking register, and for the bank's promised disclosures on material developments in the conversion.

Source: Gulf Bank disclosure to Boursa Kuwait; Al-Jarida