Qatar’s confusing crackdown

Author: | Published: 2 Mar 2011

Qatar Central Bank (QCB)'s decision to force international banks to separate their conventional and Islamic finance lending entities may hurt the wider shariah-compliant financing industry.

"This may be a setback for the industry as a whole," said Samer Eido from Simmons & Simmons in Doha. "Instead of encouraging people to come to Islamic banking ... this will scare away people and reduce the market share of Islamic banking generally."

The ban may also damage Qatar's reputation as a financial centre. One bank counsel said that if the bank is looking to expand into new markets, decisions such as this don't help the country's cause.

"If you can't offer the full range of services that you would like to under one roof, and you have to effectively create another bank, is it really worth it when you've got another country knocking on the door offering the ability to set up now?" said the...