Diplomatic sanctions: Qatar to support banks if deposits withdrawn
Saudi, UAE and Bahraini institutions have about $18b in Qatari banks
Buildings are seen on a coast line in Doha, Qatar June 5, 2017. PHOTO: REUTERS
DOHA:
Qatar’s government is prepared to support local banks if foreign institutions withdraw deposits from them because of an economic boycott against Doha, the chief executive of the Qatar Financial Centre (QFC) said on Monday.
Gulf crisis threatens Qatar Airways transit business: experts
Yousef al-Jaida said institutions from Saudi Arabia, the United Arab Emirates and Bahrain, which broke off diplomatic and transport ties with Qatar on June 5, had about $18 billion of deposits in Qatari banks that would mature in two months.
If necessary, the Qatari government will step in to cover those funds if they are withdrawn and other banks in the QFC are still providing short-term US dollar deposits to Qatar’s banking sector, he told reporters.
“Whether the blockade countries make a decision on retracting those deposits is yet to be seen. Those mature in a couple of months, so there’s no impact as of yet. But this is a measure and a point that we are paying close attention to.
“We’ve been in a worse crisis in 2008, a financial crisis not a political crisis, and the government was able to step in and buy out the default portfolios of loans and real estate at that time. If a need arises, the government can easily step in and enforce similar measures.”
The QFC licenses foreign companies to exempt them from the Gulf state’s local ownership laws. The centre has its own legal, regulatory, tax and business infrastructure, allowing for 100% foreign ownership and full repatriation of profits.
Qatar hits out at Arab states for ‘using terrorism as publicity stunt’
The UAE central bank has asked banks to apply “enhanced customer due diligence” when dealing with six Qatari banks, making the UAE institutions reluctant to do fresh deals.
Guidance from the Saudi and Bahraini central banks has also deterred new business with Qatar, bankers said.
Jaida said the QFC did not plan to take any action against companies from Saudi Arabia, the UAE or Bahrain in response to the sanctions by their governments, which accuse Doha of backing terrorism.
Published in The Express Tribune, June 20th, 2017.
Qatar’s government is prepared to support local banks if foreign institutions withdraw deposits from them because of an economic boycott against Doha, the chief executive of the Qatar Financial Centre (QFC) said on Monday.
Gulf crisis threatens Qatar Airways transit business: experts
Yousef al-Jaida said institutions from Saudi Arabia, the United Arab Emirates and Bahrain, which broke off diplomatic and transport ties with Qatar on June 5, had about $18 billion of deposits in Qatari banks that would mature in two months.
If necessary, the Qatari government will step in to cover those funds if they are withdrawn and other banks in the QFC are still providing short-term US dollar deposits to Qatar’s banking sector, he told reporters.
“Whether the blockade countries make a decision on retracting those deposits is yet to be seen. Those mature in a couple of months, so there’s no impact as of yet. But this is a measure and a point that we are paying close attention to.
“We’ve been in a worse crisis in 2008, a financial crisis not a political crisis, and the government was able to step in and buy out the default portfolios of loans and real estate at that time. If a need arises, the government can easily step in and enforce similar measures.”
The QFC licenses foreign companies to exempt them from the Gulf state’s local ownership laws. The centre has its own legal, regulatory, tax and business infrastructure, allowing for 100% foreign ownership and full repatriation of profits.
Qatar hits out at Arab states for ‘using terrorism as publicity stunt’
The UAE central bank has asked banks to apply “enhanced customer due diligence” when dealing with six Qatari banks, making the UAE institutions reluctant to do fresh deals.
Guidance from the Saudi and Bahraini central banks has also deterred new business with Qatar, bankers said.
Jaida said the QFC did not plan to take any action against companies from Saudi Arabia, the UAE or Bahrain in response to the sanctions by their governments, which accuse Doha of backing terrorism.
Published in The Express Tribune, June 20th, 2017.