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Tuesday, May 11, 2021

Non-Sharia-compliant banks brace for rush as they close out Islamic banking services

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Today is the last day for customers who have utilized Islamic banking services with non-Sharia-compliant banks to convert their accounts to conventional ones and remain with the same bank or switch them to Islamic banks.

Earlier this year, Qatar Central Bank ordered non-Sharia-compliant banks to close Islamic branches by the end of the year and to stop taking deposits in those units immediately.

Analysts say the directive is an attempt to separate conventional and Islamic financing to prevent the income from conventional banking from contaminating “halal” banking.

QCB has remained firm on the year-end deadline, much to the disappointment of international banks like HSBC, which derived up to a fifth of its revenue from Islamic service offerings.

As Dec. 31 looms, many banks have put special teams into place to handle the expected influx of traffic.

Come year-end, several bank employees will also find themselves out of jobs.

The Peninsula reports:

The employees of the branches that face closure have been allowed the option to either be shifted to the conventional arms of the bank or seek a ‘release’ and look for jobs elsewhere.

It is learned that most staff members have declined to be shifted to conventional operations of the banks and have asked for a ‘release’.

And since the employees are mostly experienced they hope to be absorbed by the Islamic banks that in any case need more staff to cater to an ever-expanding target audience.

Have any of you had to hustle to shuffle around your banking habits because of QCB’s directive?

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