There are five Islamic institutions in Qatar: Barwa Bank, International Islamic, Masraf Al Rayan and Qatar Islamic Bank. Qatar First Bank – regulated by the QFC Regulatory Authority – is the first independent, Sharia compliant investment bank.

Qatar’s Islamic banks are expected to grow to USD100 billion by 2017 in view of a surge in demand for local credit to finance government infrastructure and investment projects.

In February 2011, QCB asked banks to separate their Islamic and conventional lending operations by 31 December 2011. The Islamic banking operations of other conventional banks are now barred from Qatar’s market. QCB took this action due to certain supervisory and monetary issues, namely that holding both Islamic and non-Islamic deposits incurs different risks and reporting methods. The banks either wound up their Islamic operations or sold their Islamic banking components. Some banks however have still not fully divested their Islamic bank portfolios, choosing instead to take advantage of a provision in the QCB ban which allows them to hold existing Islamic loans until maturity.

Law No 13 of 2012 requires that Islamic banks must have a Sharia board with at least three qualified members approved by the shareholders. Neither they nor members of their family may be employed or hold shares in the entity.

Institutions and services must abide by the regulations set out in the Holy Qur’an and Sharia (Islamic Law). Charging riba (interest) is haram (forbidden). Islamic banks charge fees for services and engage in profit sharing, enabling them to offer comparable facilities to those of conventional banks. Under a Mudharabah (profit sharing) contract, the rabbul maal (owner of the money) authorises the bank to invest funds as per Sharia law to make justifiable returns. Other concepts of Islamic banking include Wadiah (safekeeping), Musharakah (joint venture), Murabaha (cost plus) and Ijarah (leasing). Bai (saving) is halal (allowed).

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