Trade Financing

How Does the Banking System Operate
There are a total of nine local banks operating in Qatar: Ahlibank, Al Khaliji Bank, Barwa Bank, Commercial Bank of Qatar, Doha Bank, International Bank of Qatar, Qatar Development Bank, Qatar Islamic Bank, and Qatar National Bank. Seven foreign banks also work in the local market: HSBC, Mashreq Bank, Arab Bank, BNP Paribas, Standard Chartered Bank, United Bank and Bank Saderat Iran. The Qatari banking sector is dominated by Qatar National Bank (QNB, 50% state-owned), which is the oldest and largest Qatari bank and has over 40% share of the banking sector’s total assets as of 2007. QNB is followed by Commercial Bank with 16% of assets and Doha Bank with 11%.

Additionally, the Qatar Financial Centre, established in 2005 to attract international banks, law firms and insurance companies to Qatar by offering a streamlined and modern regulatory framework, has so far attracted over 80 institutions.

Qatar Central Bank (QCB) supervises all banks, financial institutions and exchange houses in Qatar outside the QFC. In addition to its normal responsibilities, which include issuance/redemption of Qatar’s currency, control of monetary policy and monitoring of the banking system, QCB requires all banks to meet the standards of the Bank of International Settlement (BIS), a council of worldwide central bank governors. Most banks in Doha have maintained a comfortable capital adequacy ratio above the 8 percent level required by the BIS. This is a ratio between total equity plus reserves and total risk weighed assets, i.e., loans and investments of a bank not including loans to the GOQ.

The GOQ ensures that the banking sector continues to enjoy depositors’ confidence, despite the fact that no deposit insurance exists. QCB also ensures that annual financial statements of all banks operating in Qatar comply with international standards and that the auditing process is carried out by internally recognized auditors. QCB requires that auditors be changed every three or four years.

The banking sector in Qatar has grown very rapidly over the past few years on the back of a robust economy with high rates of GDP growth. From 2005-2008, total assets of the banking sector grew at a compounded average growth rate (CAGR) of almost 47% whereas loans grew by 48% during the same period.

Foreign-Exchange Controls
The Qatari Riyal (QR) is fixed to the U.S. Dollar (USD) at USD 1:00 = QR 3.64. Qatar has no restrictions on foreign exchange and money transfer. However, some restrictions exist when transferring in excess of QR 100,000 (USD 27,472).