DUBAI,(Reuters) – Abu Dhabi Islamic Bank has received approval from the Qatar regulator to open an Islamic branch in the wealthy Gulf Arab state, six months after a central bank verdict asked conventional lenders to stop operating Islamic branches in the country.
“We have received authorisation from the government,” a spokeswoman for ADIB said on Thursday, adding that Qatar is a market of interest for the Islamic lender.
The Qatar Financial Centre Regulatory Authority (QFCRA) said in a statement that the authorisation will allow the bank to carry on regulated activities in relation to deposit taking, providing and arranging financing facilities and managing investments.
ADIB’s licence approval comes after Qatar’s central bank issued a ban in February on conventional banks’ operating Islamic branches, amid concerns of overlap between the two and criticism that conventional lenders with Islamic operations had an unfair advantage over standalone Islamic institutions. Lenders have until Dec. 31 to comply.
The central bank did not provide any direction on whether banks can apply for separate Islamic banking licences, and in the absence of transparency, some conventional banks have offered customers the option of converting Islamic deposits into conventional accounts.