Governor of Qatar Central Bank H E Sheikh Bandar bin Mohammed bin Saoud Al Thani (fourth right), Secretary-General of IFSB Dr. Bello Lawal Danbatta (first right) with other officals during the 4th IFSB Innovation Forum yesterday.
Doha: Qatar has emerged among the top five global Islamic finance jurisdictions with about 6.5 percent of worldwide Islamic banking industry (IBI) assets valued at $154bn as of June 2022, Governor of Qatar Central Bank (QCB) H E Sheikh Bandar bin Mohammed bin Saoud Al Thani said while delivering his keynote address during the 4th IFSB Innovation Forum yesterday.
The day-long forum titled ‘Innovations in Sustainability and Regulation of Financial Services’ was organised by the Qatar Financial Centre (QFC) and the Islamic Financial Services Board (IFSB), and patronised by the QCB.
Addressing the forum, QCB Governor said an important aspect of Qatar’s financial system is its banking eccentricity which contributes significantly and positively to economic growth. The banking sector continues to play an important role in Qatar’s economic growth, as well as in the forefront of the infrastructure funding required for the FIFA World Cup being hosted by the country two months from now, he said.
He added: “Qatar has four Islamic banks, and has 28 percent of its banking assets held by Islamic banks. Islamic banking assets in Qatar have reached $154bn as of June 2022. According to the IFSB report, Qatar is categorised among 15 important jurisdictions where Islamic banking has reached over 15 percent market share. With about 6.5 percent of worldwide Islamic banking assets, Qatar is one of the top 5 jurisdictions in the global Islamic finance industry with sufficient regulatory and supervisory policies consistent with relevant international standards”.
The QCB Governor added that a primary objective of the Central Bank is to develop a regulatory framework that promotes growth and innovation within the financial industry.
“Digital acceleration and innovation fall under the Qatar National Vision 2030, which focuses on achieving a secure cashless society, with enhanced financial inclusion as well as captivating a sustainable economy. Qatar national banks have started their digital transformation strategies. And with the upcoming FIFA World Cup, the QCB has taken multiple initiatives to enforce an affordable digital payments system in the State,” he said.
The QCB has recently issued the first license in Qatar for providing digital payment services, the Governor noted, and added: “Our digitalisation journey also includes launching Google Pay last month in Qatar. Additionally, QCB has begun a multi-year strategic initiatives to modernise the financial architecture for digitalisation and fintech”.
It may be noted that QCB on Tuesday has just announced start of a project to develop infrastructure for payment and settlement systems in the country. The project provides new services including instant transfers between accounts, unified address service for making payments, service the central system to reduce fraud and money laundering, electronic bill payment service, credit services (Buy Now, Pay Later), providing scalable future payment system for next 10 years, providing 24 hours a day payment services and instant transfers, control system for QCB to monitor all transactions and maintain the confidentiality of information, and integrating most payment systems into a unified system at the QCB, among others.
Speaking about the growing importance of environmental sustainability and social responsibility in the financial sector, QCB Governor said: “The need to rebuild the world with sustainable and environmentally friendly investments is becoming more urgent. ESG has been discussed as a critical component of the government osmosis. Qatari banks have already begun the journey toward green banking by issuing green bonds, complementing green loans, and standardising ESG disclosures. Increasingly, banks are voluntarily integrating ESG risk analysis into their credit assessment and approval process for corporate clients.
“I believe these are important turning points toward developing a more cohesive and sustainable framework. To make progress, the world needs more than words, the solutions, and recommendations. It needs real actions on the ground,” the Governor added.
Also addressing the opening ceremony, Secretary-General of IFSB Dr. Bello Lawal Danbatta noted that global Islamic financial services industry assets grew by 11.3 percent year-on-year with total estimated assets of $3.1 trillion in 2021.
He said: “There are also increasing attention to the potential of Islamic financing sustainability. In recent years, we witnessed a rise in demand for sustainability related products and services, particularly in the Islamic financial sector.
“In 2021, sustainability sukuk issuances amounted to $5.3bn, of which $1.6bn or 29 percent were green sukuk. The growing interest was due to substantial issuances of sustainability and ESG-related sukuk from both sovereign and private sector issuances. We expect that moving forward, this trend is likely to continue, with strong commitment by the global leaders and industry players towards sustainability, as well as the increasing appetite of the investors for ethical and sustainable investments,” Danbatta added.
