Banks and Banking in Qatar
The question about where to put his money loomed large. Mr. Pereira was just making his baby steps as an entrepreneur and he did not want to make a mistake. Will being an international bank have more benefits than a local one? Or should he put all his eggs in one basket and place his trust in a private one?
Questions like Mr. Pereira’s, are justified. Afterall, it’s your life’s earnings, right? As a country that boasts of the world’s highest per capita income, the Qatari government has paved the way to ensure adequate infrastructure to protect your earnings. As such, expats generally find that banking in Qatar, with its well-maintained network of local and international banks, is easy. Although the increasing foreign exposure of Qatar’s banks may seem like a growing challenge for authorities, Qatar’s banking sector has been able to maintain its steady calm and growth.
Banking in Qatar
To get an overview of the role of the banking sector in strengthening the Qatari economy, a peek into the sector’s history is imperative as its evolution in Qatar is quite different from that of other countries.
Oil was the reason the need for banking was raised. After the exploration of oil in 1949 and till Qatar’s independence in 1971, the country was serviced by a cluster of foreign and Arab banks.
Until 1954, the Eastern Bank (now Standard Chartered Bank) was the only bank operating in Qatar. With a need to have more banks, the British Bank of the Middle East (acquired by HSBC), the Othman Bank, (formerly Grindlays Bank, acquired by Standard Chartered), and the Arab Bank began operations in Qatar in the 1950s, following by the Lebanese Bank, (now Al-Mashrek Bank) in 1960.
With a booming oil sector and nascent government up their sleeves, it was up to these banks to provide a stable platform for growth and development. When the government saw the danger of being wholly dependent on foreign banking institutions, they encouraged the creation of a number of domestic banks to strengthen the nation’s economic assets.
The first locally-owned bank was the National Bank of Qatar (QNB), which is the principal banker to the government. Since then, the number of banks in the country has grown substantially, and today a total of 18 banks (as on January 2015) licensed by the Qatar Central Bank make the Qatari banking sector one of the most competitive sectors in the region.
The banking industry is supervised by the Qatar Central Bank, which is the mothership of all banks in the country. Its main jobs include ensuring the Qatari riyal is stable and acting as a regulatory body that supervises all financial activities of the State. It is up to this body to ensure the people that Qatar is a pioneering hub for services, business and markets.
Some of the major players in the banking industry in Qatar are:
Qatar National Bank
Qatar Islamic Bank
Local banks dominate Qatar’s banking sector and these banks have very high credit ratings, with Moody’s rating them Aa3 to A2.
The biggest player in commercial banking is undoubtedly, Qatar National Bank (QNB), and has its presence in over 30 countries across 3 continents. The bank is jointly owned by the Qatar Investment Authority and members of the public, each of whom have a 50 per cent ownership interest.
Commercial Bank is the largest of the private banks in Qatar. It set up in 1975 with members of eight prominent families in Qatar had invested their personal funds to found the bank.
Qatar Islamic Bank (QIB) is the first and largest of Islamic banks in Qatar. Established in 1982, all products and services offered by the bank are supervised by a Sharia Board. The Sharia Board ensures that the bank adheres to Islamic banking principles. For instance, Islamic banking rules forbid usurious lending (i.e., charging interest on loans).
Doha Bank is one of the largest commercial banks in Qatar. Doha Bank was incorporated in 1978 and started its operations in March 1979. Doha Bank primarily comprises four divisions: wholesale banking, retail banking, international banking, and treasury and investments. The past few years have been marked not only by an expansion in the size of the banking sector, but also its activities, level of services and an increased involvement of the government through the Qatar Central Bank in the regulation, direction and control of the sector in order to make it more efficient and competitive.
But what will work best for you? Ask us! We at BBMS make it our business to put your business first. To help you choose a suitable bank that will fortify your assets safe is our job. Reach out to us at firstname.lastname@example.org or Call us at +974 4012 0333.