Qatar’s finance and business communities are welcoming a new step by the Qatar Central Bank to streamline the process by which banks and other companies in the insurance, finance and investment sectors obtain licenses to establish and commence operations.

The bank in September adopted a strategy that assigns the oversight process and the responsibility for issuing licenses and rules of procedure to one party, the Central Bank.

“The standardisation of criteria is in the interest of the banking and private sectors and restores foreign investors’ confidence in the banking sector,” Qatari businessman Ahmed Hussein al-Khalaf, founder of Al-Khalaf Investment Group, told Al-Shorfa.

There were previously three oversight agencies, each with its own system, guidelines and rules: the Qatar Central Bank, the Qatar Financial Markets Authority (QMFA) and the Qatar Financial Centre Authority, he said.

Each of the three agencies issued licenses for particular segments, which created inconsistencies in the banking system, al-Khalaf said.

“Having multiple agencies in charge of oversight of the financial sector reduces performance and costs time and effort,” he added.

According to the new strategy, the Qatar Central Bank will be the exclusive grantor of licenses for commercial, Islamic and investment banks, and finance, insurance, reinsurance and currency exchange companies.

It has also been tasked with developing the appropriate frameworks for polices that govern the regulation and oversight of all banking services and financial markets in Qatar.

Meanwhile, the QFMA is responsible for providing stock trading oversight, analysis of bourse operations and oversight of financial brokerage companies.

“The standardisation offers many advantages,” al-Khalaf said. “Foremost among them is that halted laws related to the oversight of bank operations and performance will be activated, as will laws related to the licensing of currency exchange, financial brokerage and financing companies.”

Qatar does not need new laws as much as it needs to enforce ones that were passed long ago, and perhaps amend and update these to align them with the country’s current economic growth, al-Khalaf said.

Economist Taha Abdul Ghani, managing director of Nama Economic Consulting, praised the new step to standardise oversight of “this vital sector”.

“The coming years require uniform standards issued by a single agency,” as the current system of duplication in licensing and oversight of the banking system was faulty, he said.

Qatari banking expert Abdul Rahman al-Mir said he believes the new strategy will ensure that banking activity in Qatar is transparent and flexible, and will make it more robust and increase its potential, especially in light of the growth expected to take place in the country in the coming years, ahead of World Cup 2022, which Qatar will host.

*This article was published by Al-Shorfa.com. Read the original article here.