Qatar is planning to set up a central Shariah committee for Islamic banks to create consistency in Islamic finance, according to the country's central bank.
This is to ensure that the country’s financial regulations are benchmarked to international standards, said the Second Strategic Plan for Financial Sector Regulations (2017-22), which was recently released by the Qatar Central Bank Governor HE Sheikh Abdulla bin Saoud al-Thani.
A recent report by the World Bank and the Bahrain-based General Council for Islamic Banks and Financial Institutions suggested further action by regulators to strengthen the sector’s governance as Islamic banks need robust risk management and Shariah-compliance functions with momentum growing for updating corporate governance practices in the industry.
Highlighting there was a need to create consistency in the financial sector regulation; the report said it could be achieved by addressing the regulatory gaps and overlaps.
The second strategy stressed the need to establish a formal mechanism to coordinate all matters, information requests and country positions on regional financial stability issues at the Gulf Cooperation Council (GCC), regional and international regulatory forums.
It is imperative not only to facilitate and improve cross-border access to relevant credit information data but actions should also be undertaken to unify regulatory programmes for supervision at regional level to enable financial services companies (brokers) to trade on securities within the GCC markets.
On the need to create consistency in the insurance licensing standards, rules and regulations; the strategy, prepared by the QCB in collaboration with the Qatar Financial Market Authority and the Qatar Financial Market Regulatory Authority, highlighted the need to align with the globally set principles.
One of the action points (being contemplated by the QCB) is assessing remuneration and commission framework of financial advisers and insurance intermediaries and implementing an appropriate conduct of business regime.
An Alpen Capital report recently said Qatar's insurance industry is expected to grow more than 9% to $4.6bn by 2021 as rising population continues to drive the demand for health, motor, property and other retail cover; while strategic economic diversification plans help enhance the base of assets available for underwriting.
In 2016, the QCB issued new regulations for insurers on licensing, controls, accounting, risk management and actuaries’ reports and also stipulated minimum capitalisation levels and limits on risky asset classes, thus aiming at improving solvency of the companies.
The new strategy is also looking at supporting the growth of the asset management sector through aligning, where possible, requirements across regulatory frameworks.
On the strategy to enhance cooperation and communication with ministers and other government entities and the public, QCB said there was a need to strengthen the framework of cooperation with the Ministry of Finance regarding matters necessitating close policy coordination.
There was also a need to ensure effective coordination with other relevant ministries and government bodies for interchange of data and implement a joint financial sector regulatory communication and media strategy.
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