(MENAFN - Qatar News Agency) The assets of Islamic banks in Qatar were up to QR195 billion at the end of 2012 compared to QR8.8 billion 10 years ago, HE Governor of the Qatar Central Bank (QCB) Sheikh Abdullah bin Soud Al Thani said Sunday.
Speaking at Oman's Second Islamic Banking and Finance Conference HE the Governor of the Qatar Central Bank said that the assets of Islamic banking represent 23.8% of the assets of the entire banking sector, up from 14% back in 2002. Deposits in Islamic banks represent 26.6% of the deposits in the banking sector. Islamic banks have a total of QR121.6 billion in deposits.
Profits of Islamic banks jumped to QR3.8 billion during the same period. One of the results of the increased demand for Islamic banking services, HE the Governor of the Central bank said, were that commercial banks asked in 2005 for offering their own Islamic banking services. The Central bank granted the request in order to increase competitiveness of the Islamic banking sector.
The assets of Islamic banking services offered by commercial banks are QR 45.7 billion, representing 31% of the total assets of the banking sector, he noted.
HE the Governor of the Central Bank said the Central Bank had banned commercial banks from offering Islamic banking services in 2011, noting that there were a number of reasons for the ban and one of the major ones was to enhance the ability of Islamic and commercial banks to manage their risks more efficiently. There were reasons related to regulation and the monetary policy, HE the Governor of the Central Bank added.
HE the Governor maintained that a number of challenges still face the Islamic banking and finance despite its success.
The main challenges according to HE the Governor of the Central Bank was developing new services that were in compliance with Islamic Sharia and suitable with the requirements of the global financial system. There is also a need to develop legislation that govern the relationship between Islamic banks and its customers that are consistent with international law, he said .
HE the Governor said that Qatar's keenness to encourage Islamic finance extends beyond banks to reach investment companies and Islamic finance companies. HE the Governor of the Central Bank of Qatar Sheikh Abdullah Bin Soud Al Thani praised the progress Islamic banks made world wide saying that the total assets of Islamic banks worldwide reached 1.3 trillion at the end of 2011 and the assets could potentially reach 1.8 trillion at the end of this year