The Qatar Central Bank issued its Regulatory Framework for Digital Banks on 2 December 2024, setting out licensing, governance, and prudential requirements for institutions seeking to operate as digital-only banking providers in the country.
The framework covers areas including capital adequacy, liquidity management, consumer protection obligations, and technology risk management.
GOVERNANCE AND TECHNOLOGY RISK
Governance requirements under the framework set expectations for board composition, management accountability, and internal controls at digital banks. The framework also includes technology risk management provisions.
The framework's consumer protection provisions cover areas such as fair treatment, complaint handling, and transparency in the disclosure of product terms.
To be licensed, a prospective digital bank must show a commitment to providing affordable access to financial services and promoting financial inclusion for unserved or underserved segments, have its headquarters in Qatar and have a majority of its board members resident in the country.
REGIONAL CONTEXT AND APPLICATION PROCESS
Several jurisdictions across the Gulf Cooperation Council had already moved to licence or regulate digital banks ahead of Qatar's framework, including Bahrain and Saudi Arabia.
The framework also sets out the process through which institutions can apply for a Qatari digital banking licence.
Bank news that matters, every weekday.
Follow The Global Banker on LinkedIn