(MENAFN- The Peninsula) By Satish Kanady I The Peninsula
Steps are under way to harmonise the Sharia'h regulatory framework for Qatar's Islamic banking sector. This include, establishing a centralised Sharia'h supervisory in Sharia'h governance, in line with the best global practice.
Qatar Central Bank (QCB) revealed that a consultancy firm has already been entrusted with the mandate of preparing Sharia'h principles and standards that govern the various Islamic banking products and transactions and the legal supervision thereof.
Currently, the Sharia'h governance structure of Islamic banking institutions in the country remains mostly decentralised. Individual banks have their own Shaira'h Supervisory Boards to oversee their operations and ensure their compliance with the Islamic principles.
The establishments of a centralised Sharia'h supervisory body will help achieve greater market-wide consistency and credibility in Sharia'h governance, in line with the best global practice, QCB noted its 10th Financial Stability Review (FSR)
The QCB document noted Qatar's Islamic banks have registered a Compound Annual Growth Rate (CAGR) of 10.3 percent since the segregation of Islamic business from the conventional banks back in 2012. Islamic and conventional banking operations segregated in 2012 in an effort to provide a level playing field for the Sharia'h compliant banking institutions.
Excluding the previous two years of lower growth in assets as compared to its Conventional peers, Islamic banks have registered a Compound Annual Growth Rate (CAGR) of 10.3 percent since the segregation of Islamic business from the conventional banks. Conventional banks lag behind at 9.8 percent annualized growth during the same period.
Citing 'Qatar Islamic Finance Report 2018', the QCB reports said Islamic banks in Qatar are looking to expand into nascent Islamic finance markets abroad, where they can leverage their market expertise and resources to maintain growth.
Qatar Islamic banks are pursuing such a strategic opportunities, seeking to operate in international markets such as Morocco and the UK. This opens new markets with significant untapped demand for Islamic finance and provides funding cost diversification to the parent Islamic bank in Qatar, the report said.
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