Interview: Sheikh Bandar bin Mohamed bin Saud Al Thani
Are you happy with the progress Qatar CB has made in minimising write-offs and defaults?
SHEIKH BANDAR BIN MOHAMED BIN SAUD AL THANI: It is too early to express sentiment one way or the other. Qatar CB has now been operating under Qatar Central Bank for just over a year, and it will take another three-to-five years before we will be able to identify a significant impact on write-offs and defaults. I am happy that banks are now able to see customer credit reports as this will assist banks in making more informed decisions and serving their customers more effectively. This, in turn, will minimise write-offs and delinquencies. It is difficult to compare our progress with other countries in this regard, as the evolution of the economy here is very unique and each banking sector has a different risk appetite. Let us not forget that the credit bureau is an arm of Qatar Central Bank and is merely a tool for banks. The regulations on loan provisions and risk administered by the central bank will have a far greater impact on the minimisation of write-offs and delinquencies.
In these early stages of Qatar CB, how much emphasis is given to educating both individuals and banks about what the organisation’s role is?
SHEIKH BANDAR: Significant emphasis is being placed on ensuring both banks and individuals know about Qatar CB’s role in the sector. For the banks, the main message we have been trying to convey is that Qatar CB was established to help them offer an enhanced service to their consumers. We have organised workshops and are training the staff that will be using the interface. You can expect that banks will utilise the system to its full potential straightaway. However, it is a new concept in Qatar, and so it is important to promote awareness of how to interact with Qatar CB.
Educating individuals is more of a challenge. We are focusing on public awareness through a media campaign, conveying the role of Qatar CB to the public. We need to educate people as to what a credit report contains and how it is used. In the future we will also advise people on how they can improve their credit rating. It is important to highlight to individuals that Qatar CB does not interfere with the decision-making process, but merely allows the bank to view an individual’s credit history and assess creditworthiness.
Do you anticipate Qatar CB working with Qatar Financial Centre (QFC)-affiliated organisations?
SHEIKH BANDAR: We have received a request from QFC to be a member and for access to the Qatar CB database, but unfortunately the current law does not allow access to this information by any institution apart from those operating under Qatar Central Bank.
However, the advancements in new legislation which will move all financial regulatory bodies under the umbrella of the central bank will allow QFC-affiliated organisations to access Qatar CB. Additionally, the law will also allow us to encompass a much greater part of the economy, including, for example, sectors such as telecoms, utilities and insurance.
I believe this law is in its final stages and we have taken steps to work with stakeholders in telecoms and insurance to begin to develop the product to suit their needs. We are also aware of the technology needed. This is going to be a great step in the advancement and sophistication of our economy. The availability of credit information to the broader economy is very important and will help organisations in their decision making and risk management.
Is easier access to credit information likely to increase competition within the banking sector?
SHEIKH BANDAR: As the banks now have access to credit information, they can rate customers according to their creditworthiness. Customers with a good credit rating will be in high demand and competition will be geared towards offering them enhanced services, better interest rates and preferential treatment.
The transparency available to all banks will increase the level of competition, which will benefit consumers.
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