Qatar’s Islamic finance sector to get central regulation

The Islamic finance sector in Qatar is moving towards a higher level: Efforts are underway to standardise and centralise the regulations for entire Islamic banking and finance industry in order to align the sector with the best global practices.

This is the core of the recent initiative of the Qatar Central Bank (QCB) to adopt central supervision for the sector, following the examples of countries such as Malaysia and Indonesia and others in the Gulf Co-operation Council in order to harmonise Shariahcompliant banking products and

financial services.

The QCB — according to its Financial Stability Review for 2018 — said that measures were in place to establish a centralised Shariah supervisory body and create Shariah standards to govern Islamic banking products and transactions. This would end the practice of Qatari Islamic banks of self-governing by individual Shariah boards and also help overcome controversies over some non-standard financial product structures.

Further details are still to be announced, especially the date of the launch of such a centralised supervisory body, and how it will operate. This is of importance particularly for international financial institutions seeking to do Shariah-compliant business with Qatari banks and financial institutions.

The move by the QCB comes at a time when newest figures on the Islamic banking and finance industry have been released by the Malaysia-based Islamic Financial Services Board (IFSB), an international organisation promoting the Islamic banking and financial services industry.