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Banking and Finance
Under Law No 13 of 2012, the Financial Stability and Risk Monitoring Committee shall study existing and future risks related to all banking, financial, insurance and stock market activities. The panel works closely with the Ministry of Finance to frame general policies. The law provides strict penalties for anyone accepting deposits from the public without a valid licence from the banking regulator – violators can face a jail term of up to five years and/or a fine of up to QAR5 mn. For those refusing to accept the legal tender of Qatar, there is a jail term of three years and/or a fine of up to QAR5 mn. Issuing forged currency means 10 years in jail and/or a fine of QAR10 mn. Manipulating accounts incurs a prison term of up to three years and/or a fine of up to QAR200,000. Regulations in 2013 curbed investment options for local banks. Equities and bonds can account for up to 25% of a bank’s capital and reserves; debt issued by the government and national banks are exempt. There is also a limit on the amount placed with individual companies and unlisted securities: a maximum of 5% of capital and reserves for foreign investments and 10% domestically. Total foreign equities is capped at 15%. The Qatar Renminbi Centre opened in 2015 and is the first in the region to offer Renminbi (RMB) clearing and settlement, increasing financial connectivity between China, Southwest Asia and the MENA region. The centre provides access to China’s onshore RMB and foreign exchange markets to local financial institutions – Chinese companies have become active partners in Qatar, and the RMB centre will facilitate trade via their agreement with QCB. qatarrmbcentre.com
The Second Strategic Plan for Financial Sector Regulation 2017–2022 QCB, the QFC Regulatory Authority (QFCRA) and the Qatar Financial Markets Authority (QFMA) jointly launched in December 2017 the Second Strategic Plan 2017–2022 for the future of financial sector regulation in Qatar, an extension of the First Strategic Plan 2013–2016. The new plan comprises five main goals: • Enhancing financial sector regulation and promoting regulatory cooperation. • Developing financial markets and fostering financial innovation. • Maintaining integrity of and confidence in the financial system. • Promoting financial inclusion and financial literacy. • Developing human capital.
The plan aims to create a regulatory framework allowing growth, is 'inclusive and sustainable', promotes innovation and fintech, and successfully tackles cyber-security threats. qcb.gov.qa
Qatar Credit Bureau Bad loans have been reduced since the Bureau started operations in 2011. The centre cannot grant credit facilities to individuals nor impose restrictions on banks. Qatar Credit Bureau provides analytical data and supports banks’ use of advanced techniques in risk management, as well as support sustainable growth of credit in Qatar. It provides banks with information on customers' total exposure in the market and the loans they hold, enabling banks to choose prospective customers. cb.gov.qa
Loans, Bank Charges and Interest Rates
Law No 20 of 2019 on combating money laundering and terrorism financing was issued in September 2019, replacing Law No 4 of 2010, with implementing regulations following in December. The law is in accordance with the latest standards adopted by major international organisations including Financial Action Task Force, highlighting Qatar's regional role in setting standards in its legal and regulatory framework for combating money laundering and terrorism financing.
Loans: Under QCB rules, the default period for a substandard loan is three months or more, for a doubtful loan six months, and a bad loan nine months. Banks have to closely monitor loan disbursement and forward reports on customer creditworthiness to QCB. There is also a duty to track and follow defaulting customers and seek resolution – if this fails, they will take legal action. Non‑payment of loans could lead to a travel ban for Qatar and possibly the GCC.
Fintech regulations Noting the increasing growth and popularity of fintech, QCB has established the Fintech Regulatory Sandbox and launched Qatar FinTech Hub (QFTH) as a means of boosting financial innovation, one of the objectives of its strategic plan (see below). The regulatory sandbox, co-founded by Qatar Development Bank, invites entities to safely live-trial their services in the digital payment services space. fintech.qa
QCB has imposed ceilings on the amounts a bank can lend as a personal loan to citizens and expatriates. Banks cannot lend more than QAR400,000 to an expatriate, over a maximum repayment period of 48 months, against a maximum 50% of total monthly salary, and at a maximum 6.5% interest rate. For Qatari citizens there is a maximum loan of QAR2 mn over a maximum 72 months. Banks cannot use post‑dated cheques for the loan value.
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