Doha: Qatar Central Bank (QCB) will go ahead with its decision to close down the Islamic windows of conventional banks in the country by this year-end. The segregation of the Islamic and conventional banking operations would be done by strictly adhering to the country’s fiscal and monetary policies, said Qatar Central Bank Governor H E Sheikh Abdullah bin Saud Al Thani.
QCB has recently issued specific directives to each of the conventional banks that have Islamic branches, directing them to stop opening new Islamic branches, accepting Islamic deposits and dispensing new Islamic finance operations.
As for the Islamic branches’ current assets and liabilities including deposits and finance operations the QCB has given a time frame up to December 31, 2011 to manage these by collecting the balances.
Delivering the key note address on the opening day of International Conference on Islamic Economics and Finance yesterday, he said the overlapping nature of non-Islamic activities of conventional banks were making it difficult and complex for the QCB to prepare accurate financial reports.
It is impacting negatively on the proper preparation of the reports at the expected quality standards of Qatar’s financial system. The overlapping of the two banking models could undermine the free and transparent competition between banks, he said.
The local Islamic banks in Qatar is posting sound growth rate that is being reflected on the robust Qatari economy.
He said he was confident that the Islamic banks in Qatar are capable of facing current economic slowdown and any possible impact of the crisis in the developed economy. However, he called on the banks to come out with fresh products that suits the changing demands of the consumers.
The Islamic banking model has been on a growth trajectory over the years. So, they must develop their own mechanisms to tackle the emerging challenges faced by the global economy in these changing times
Islamic banks are mainly facing two challenges. It needs to develop a solid legal infrastructure for their transactions that matches to the global quality standards.
Second, it must come out with less complicated financial products. These two challenges being faced by the local Islamic banks are being studied by international organisations, Sheikh Abdullah said.
He added that Islamic banks grabbed a lot of international attention in the past few years, due to their success in Islamic finance.
Dr Ahmad Mohamed Ali Al Madani, President, Islamic Develoopment Bank; Dr Hatem El-Karanshawy, dean, Faculty of Islamic Studies (QFIS); Qatar Foundation; Dr Mabid Al Jarhi, President, International Association for Islamic Economics (IAIE) and DR Nabil Dabour, Head of Research, OIC Ankara Center (SESRIC) were among other who addressed the opening session.