On the 30th August 2022, the Qatar Central Bank (QCB) published Circular No 25 of 2022, issuing the latest ‘Governance Instructions for Banks’ (QCB Governance Instructions). The QCB Governance Instructions include a separate section on governance requirements in Islamic banks.
The QCB Governance Instructions require all Islamic banks to have a Shariah supervisory board composed of at least three Shariah scholars to ensure compliance with Islamic Shariah principles.
Additionally, the QCB Governance Instructions require an Islamic bank to make complete and sufficient disclosures to its Shariah supervisory board concerning the nature of financial products and services for which a Shariah opinion is required. The board of directors of Islamic banks must implement appropriate policies and mechanisms to ensure that these disclosure rules are complied with.
There must be uninterrupted channels of communication between the Shariah supervisory board, the Shariah controller and the audit committee of the respective Islamic bank, through which the audit committee reports to the Shariah supervisory board any observations and concerns, as well as the measures taken to address such concerns, in a timely manner.
The QCB Governance Instructions set out a number of obligations and duties that Islamic banks owe to investment account holders. These duties include, among other things, a fiduciary duty to protect the interests of investment account holders, in particular, unrestricted investment account holders whose investments are combined with the investments of the shareholders in the assets of the bank, and which the bank manages as a Mudarib without any restrictions or involvement from the account holders.
Islamic banks in Qatar are continuously developing and updating their digital infrastructure systems. Qatar Islamic Bank (QIB) recently launched a mobile application which facilitates the payment of school tuition fees. Through this feature, families are able to settle school tuition fees and other school preregistration fees quickly and efficiently. The general manager of QIB, D Anand, commented that: “This new feature will allow customers more flexibility to complete the school fee payment process, eliminating the hassle of having to visit the school, and more options to enjoy even more control of their finances anytime and from anywhere in the world.”
In a recent market announcement, Qatar First Bank (QFB) declared that it raised an amount of QAR182.48 million (US$49.79 million) from the sale of 151.29 million unsubscribed shares, resulting in net sale proceeds of QAR1.21 (33.01 US cents) per share. These proceeds will be distributed directly to shareholders who have accounts with the Qatar Central Securities Depositary.
Amjad Hussain is a partner at K&L Gates. He can be contacted at [email protected].