Qatar slaps banks with Islamic units ban
Doha, February 6, 2011
Qatar's central bank asked conventional lenders to close down their Islamic operations amid worries of overlap between the two, banking sources said on Sunday, in a surprise move seen prompting other regions to follow suit.
The central bank issued a circular over the weekend, saying it 'has been decided to terminate the activities of the Islamic finance services' offered by conventional banks.
The order is effective immediately but gave lenders a grace period until December 31 to shutter operations, sources said.
Shares in Qatar National Bank (QNB), the Gulf state's largest lender by market capitalisation, fell 4.8 percent on the announcement. The bank offers Islamic services which comply with sharia laws.
'I don't think anyone was expecting it. It certainly came as a surprise and will affect us and others quite materially,' said a Doha-based banking source who did not want to be identified.-Reuters