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Instructions To Banks – September 2013
Fifteenth Edition September 2013 5
Subject Page
Definitions In accordance with article no. (1) of The Law of
the Qatar Central Bank and the Regulation of
Financial Institutions (Law no. (13) of 2012)
32-36
Part One Exchange Rate Policy 37-39
First: Decree of Qatari Riyal Exchange Rate 38
Second: Relation of the Qatari Riyal to US Dollar 39
Part Two Monetary Policy 40-57
First: Definitions 41
Second: Monetary Policy Instruments 42
1- Qatar Money Market Rates (QMR) 42
2- Management of Public Debt Securities
Repos
43
3- Required Reserve Ratio 44
4- Issuing Certificates of Deposit 45
Third: Interest/Return Rates on Qatari Riyal 52
Fourth: Credit Classification by Economic Sectors 54
Fifth: Statistics of Balance of Payments 56
Sixth: Monthly Movement of Non-Performing Loans 57
Part Three Clearing House, Payment Systems and Money
in Circulation Affairs
58-99
Chapter One: Definitions 59
Chapter Two: Cheques, Clearing House and
Payment Systems
60
First: Cheques 60
Second: Clearing House 72
Third: Payment and Settlement Systems 77
Chapter Three: Money in Circulation Affairs 87
Chapter Four: Withdrawal of Banknotes 95
Chapter Five: Qatari Currency Counterfeiting 97
Chapter Six: Security Companies 98
Part Four Public Debt 100-107
Chapter One: Regulation of Subscription in the 101
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Fifteenth Edition September 2013 6
Primary Market of Government Bonds
Chapter Two: Transferring the Ownership of Public
Debt Securities
104
Chapter Three: Circulation of Government Bonds in
Secondary Market
105
Part Five Instructions of Government Bodies 108-139
First: Ministry of Finance 109
Second: Ministry of Interior 117
Third: Ministry of Foreign Affairs 126
Fourth: Ministry of Labor and Social Affairs 127
Fifth: Ministry of Economy and Trade 133
Sixth: General Authority for Minors Affairs 135
Seventh: Cabinet 137
Eighth: Amiri Diwan 138
Ninth: Other Instructions 139
Part Six Instructions of Banking Systems 140-156
1- Smart Card and EMV Standard 141
2- Risk Mitigation for Banks' Customers 142
3- "SIBNET" Secured Network System 142
4- ATM Machines Services 144
5- NAPS Operation Regulations 144
6- Response to Claims of NAPS Reconciliations within
Limited Time
145
7- Equipment of ATM Machines with Security Devices 145
8- GCC Net 146
9- Development of Collection of Cheques 146
10- Photocopying the Original Cheques 147
11- Using the Credit Card Prefix 147
12- Points of Sale (POS) Machines 148
13- Direct Credit and Debit System (QATCH) 148
14- Transactions’ Electronic Robust Mandate System
(TERMS)
150
15- Launching Q-pay 150
16- Bill Payment via ATMs 151
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Fifteenth Edition September 2013 7
17- Customers’ Data on Remittances, and Selling and
Buying Currencies
151
18- Mobile ATM Vehicles 151
19- Controls and Standards of Security Precautions at
Banks and ATMs
152
20- Security Surveillance Systems 152
21- ATMs for Persons with Special Needs 152
22- Implementation of International Bank Account
Number (IBAN) in Qatar
153
23- Others (Caution and Warning) 155
24-Promoting Customer Awareness in the Banking
Sector
155
25- Storage Media 155
26-SWIFT User Group Chair Person 156
27- Stress Testing for purpose of Business Continuity.
Refer to circular no. (45/2013).
156
Part Seven Instructions of Supervision and Control 157-508
Definitions 158
Chapter One: Banking Risk 163
First: Capital Adequacy Ratio 164
1- Application of Capital Adequacy in pursuance
with Basel II - National Banks
164
2- Capital Adequacy - Branches of Foreign Banks 164
3- The External Auditor's Approval of Capital
Adequacy in pursuance with Basel II
165
4- Capital Requirements for Licensing New Banks 165
4/1 Minimum Capital Requirements for
Licensing a National Bank or a Branch of
Foreign Bank
165
4/2 Increase or Decrease in Capital and Reserve
Accounts - National Banks
165
4/3 Risk Reserve - National Banks 165
4/4 Maintain a reserve balance 166
5- Basel III 166
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6- Guidance on Basel Capital Adequacy Pillar II
Application: Supervisory Review and Evaluation
Process (SREP) and Application of Internal
Capital Adequacy Assessment Process (ICAAP)
167
7- Major Shareholders - National Banks 168
Second: Credit and Financing Risk 170
A- Controls on Credit Facility Classification and
Provision Determination
170
First: Instructions on Credit Facility
Classification and Provision Determination
170
A- Definitions 170
1- Credit Facilities 170
2- Rescheduled Credit Facilities 171
B- Credit Facility Classification Categories 171
1- Performing Credit Facilities 171
2- Non-Performing Credit
Facilities
172
C- Indicators of Non-Performing Credit
Facility Classification
172
1- Indicators of Non-Performing
Credit Facilities
172
2- Other Estimating Weakness
Indicators
172
3- Rescheduled Credit Facilities 173
4- Other Considerations for Credit
Facility Classification
174
D- Provision Calculation and Suspended
Interests (Returns)
174
E- Valuation of Collaterals 175
F- General Notes 176
1- minimum requirements that
may be taken into account
while putting up policies and
procedures to classifying the
176
Instructions To Banks – September 2013
Fifteenth Edition September 2013 9
credit facilities
2- Bank should calculate the
provisions in conformity with
the International Financial
Reporting Standards (IFRS)
and the same should be audited
by External Auditor
176
3- Credit Facility Classification
and Provision Determination
179
Second: Reclassification of Credit Facilities 179
Third: Updating and Submission of Provisions
Data on Non-Performing Credit Facilities
179
Fourth: Periodical Data 180
Fifth: Bills Discounted and Past Due
Installments of Loans
180
B- Debt Write-off 181
C- Credit Policies and Concentrations 185
1- Credit Policies 185
2- Credit Concentrations 185
2/1 Definitions 185
2/2 Maximum Limit of Credit
Concentration
188
3- Additional Controls 190
4- Controls on Credit Facilities in terms of
Overdrafts or Overdrawn Current
Accounts (Commercial Banks)
191
5- Purchasing Loans from Inside and Outside
Qatar
194
6- Credit Facilities Granted to Construction
Sector
195
7- Personal Guarantees against Credit
Facilities
195
8- Statement of Account on Credit Facilities
Granted to Customers
195
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Fifteenth Edition September 2013 10
9- Overdrawn Current Accounts (Islamic
Banks)
195
10- Conditions for Credit Facility Contracts
and Documents
195
11- Controls on Real Estate Finance 196
First: Definitions 196
Second: Total ceiling of Real Estate
Finance Risk
198
Third: Controls on Real Estate Finance 198
Fourth: Execution of Guarantees 199
Fifth: General Instructions 200
12- Financing Subscription to Capital of
Companies Under Establishment
202
13- Financing Subscription to Increase Capital
of Companies
204
14- Acquisition of Lands and Premises as a
Result of Credit Facilities Settlement
204
15- Interest Rate Risk on Loans 204
16- Commission on Loans and Receivables of
Islamic Finance
205
17- Collaterals against Credit Facilities 205
17/1 In case of Cheques 205
17/2 In case of Residential Real Estates 205
18- Payment Guarantees 206
19- Credit Facilities against Salary 206
19/1 Instructions: 206
First: Definitions 206
Second: Maximum Limits on
Credit Facilities against Salary
207
Third: General Controls on Credit
Facilities against Salary
208
Fourth: Rescheduling Credit
Facilities against Salary
212
Fifth: Other Issues 212
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19/2 Rate of Interest or Return on Credit
Facilities against Salary
213
20- Customers’ Obligations Due to Qatar
Development Bank (QDB) against Housing
Loans
214
21- Granting Credit Facilities in Foreign
Currency
214
22- Credit Facilities granted to Governmental
Bodies and Entities
215
D- Financing Policies in Islamic Banks 217
1- Article no. (105) of QCB Law 217
2- Sharia Supervisory Board 217
3- International Finance 218
4- Local Finance 219
5- Unimplemented Part of Istisna Contracts 219
6- Controls on Tawarruq Finance (Islamic
Banks)
220
7- Overdrawn Current Accounts (Islamic
Banks)
223
8- Commission on Receivables of Islamic
Finance
223
9- Conditions for Credit Facility Contracts
and Documents
223
E- Credit Risk Management 224
First: Establishing an Appropriate Credit Risk
Management Environment
224
Second: Operating under Sound Credit-Granting
Process
227
Third: Establishing an Appropriate
Administration System for Credit Risk
Management, Measurement and Monitoring
234
Fourth: Ensuring Adequate Controls over Credit
Risk
238
- Updated Credit Risk Management 239
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Fifteenth Edition September 2013 12
System
F- Financing Customers' Trading in Securities 240
G- Instructions to Members of Board of Directors 241
1- Ceilings and Conditions on Credit
Facilities to Members of Board of Directors
241
2- Credit Facilities to Relatives of Members of
Board of Directors
243
3- Transactions of Members of Board of
Directors with the Bank
243
4- Membership of Board of Directors 244
5- Bonuses given to Members of Board of
Directors
246
H- Country Risk Concentration (National Banks) 248
1- Definitions 248
2- Maximum Limits for Country Risk 249
3- Country Risk Management 250
4- Country Credit Facility Classification and
Provision Determination
250
5- Financial Data 251
Third: Bank Investments 252
A- Controls and Ceilings on Bank Investments 252
First: Securities Portfolio 252
1- Investments in Equity Instruments 252
2- Investments in Debt Instruments and
Sukuk
252
3- Investment Ceilings to a Bank's Capital
and Reserves
253
Second: Investment in Associates 253
Third: Investment in Real Estates (Islamic
Banks)
254
Fourth: General Instructions 254
B- Notes on Investment Ceilings 255
C- Purchasing Shares by the Issuing Banks
(Treasury Shares)
255
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Fourth: Trading in Foreign Exchange and Money
Market Instruments in favor of the Bank
257
1- Controls on Trading in Foreign Exchange,
Derivatives and Money Market Instruments in
favor of the Bank
257
2- Foreign Exchange Transactions, Forwards,
Futures, Options, and Others
257
3- Ceilings of Interest Rate Gap 258
4- Instructions of Board of Directors on Trading in
Foreign Exchange and Money Market
Instruments
258
Fifth: Concentrations of Deposits and Credit Facilities
at Banks and Financial Institutions
259
1- Definitions 259
2- Rating Banks and Financial Institutions 260
3- Maximum Credit Concentration Limits for
Banks and Financial Institutions
260
4- Additional Controls on Deposits and Credit
Facilities
260
5- Periodical Data 262
6- Periodical Statements on Credit Concentrations
for Banks and Financial Institutions
262
Sixth: Liquidity Management 263
1- General Instructions on Bank’s Liquidity
Management
264
2- Maturity Ladder of Assets and Liabilities 264
3- Cash Flows for Customer Deposits 264
Seventh: Banking Ratios and Indicators 265
A- Liquidity Ratio 265
1- Definitions 265
2- Calculation of Liquidity Ratio 265
B- Credit Ratio 267
C- Ratio of Overdraft To Credit Facilities 268
D- Ratio of Assets in Foreign Currencies To 269
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Fifteenth Edition September 2013 14
Liabilities in Foreign Currencies
E- Ratio of Fixed Assets for Bank's Use To bank's
Capital and Reserves
270
Eighth: Risk Management 271
Ninth: Islamic Financial Services in Conventional
Banks
272
Tenth: Recognition of the True Sale of Assets 274
Chapter Two: Banking Managerial Risk 275
First: Corporate Governance 276
A- Corporate Governance 276
1- Definitions 276
2- Roles and Responsibilities of Board of
Directors
276
2/1 Set and Develop Strategies, Objectives
and Policies
277
2/2 Organizational Structure Set-Up 277
2/3 Committees Constitution and
delegation of powers and authorities
278
2/4 Monitor the Implementation of
Policies and Performance and Risk
Assessment
280
2/5 Appointment of Internal Auditing
Staff and Monitoring
281
2/6 External Auditor Approval 282
2/7 Responsibility Towards Shareholders
and Other Parties
283
2/8 Board Responsibility towards QCB 283
3- Roles and Responsibilities of Executive
Management
284
3/1 Assist in Setting up and Development
of Strategies, Objectives and Policies
284
3/2 Assist in Forming the Organizational
Structure
284
3/3 Conduct Transactions and Implement 284
Instructions To Banks – September 2013
Fifteenth Edition September 2013 15
Policies
3/4 Submit Reports to the Board of
Directors
286
3/5 Preparation of Financial Statements 286
3/6 Development of Professional
Aptitude and Skills
287
3/7 Responsibility towards Internal and
External Auditors
287
3/8 Responsibility towards QCB 287
4- General Provisions 288
B- Core Principles for Banks' Remuneration
Policy/System
288
Second: Bank Senior Appointments 290
1- Appointment of General Manager/Chief
Executive Officer of the Bank
290
2- Bank Senior Appointments 290
3- Movement of Senior Staff 291
4- Official Vacations and Tasks of the General
Manager/Chief Executive Officer
291
5- Employment of Relatives 291
Third: Authorized Signatories 292
1- Statements and Correspondences 292
2- Names and Signature Forms of the Board of
Directors and General Management Members
292
Fourth: Internal Auditing 293
Fifth: Outsourcing (Outsourcing Regulations) 294
Sixth: Consolidated Supervision of National Banks,
Their External Branches and Subsidiaries
296
1- Definitions 296
2- Corporate Governance 297
2/1 Roles and Responsibilities of the Bank's
Board of Directors
297
2/2 Roles and Responsibilities of the Bank's
Executive Management
301
Instructions To Banks – September 2013
Fifteenth Edition September 2013 16
3- Concentration Risks 301
3/1 Credit Risks for Parties of Interrelated
Interests within the Banking Group
301
3/2 Customer's Credit Concentrations 302
3/3 Credit Concentrations at Banks 303
3/4 Investment Risk Concentrations 303
3/5 Real Estate Financing Concentrations 303
3/6 Credit Concentrations and Transactions
between the Bank and the Subsidiaries
304
4- Assessment of Debts and Other Assets 304
5- Capital Adequacy Ratio 304
6- Liquidity Risk 305
7- Other Risks for Assets and Provisions 305
8- Risk Management 305
9- Other Issues 305
10- Consolidated Statements and Reports for Bank
and its Group
306
Chapter Three: Modern Technology and E-Banking
Services Risks
307
Chapter Four: Relation with Customers 309
First: Customers' Investments 310
1- Investment Activity for Customers 310
1/1 Investment Business 310
1/2 Organizational Instructions 310
1/3 Relation with Customers 311
1/4 Internal Controls to Banks 312
2- Managing and Marketing Investment Portfolios
and Accounts for Customers
312
2/1 Definitions 312
2/2 Managing Investment Account 313
2/3 Issuing and Managing Investment Portfolios 315
2/4 Marketing Investment Mutual Funds and
Portfolios for Others
318
2/5 Investment Mutual Funds 320
Instructions To Banks – September 2013
Fifteenth Edition September 2013 17
2/6 Other Regulations and Instructions 325
2/7 Other Investments Issues 327
2/8 Details of the Periodical Data for Investment
Portfolios and Mutual Funds
327
2/9 Auditing Investment Portfolios and Mutual
Funds
327
2/10 Disclosure Through Advertising for
Introducing or Marketing Investment Products
328
2/11 QCB’s Non Objection to Investment
Portfolios and Products Issuance and Marketing
329
2/12 Real Estate Funds 329
3- Banks' Transactions on behalf of Customers in
Foreign Exchange, Commodities and Metals
330
4- Customers' Investments in Foreign Companies'
Stocks
331
Second: Customers' Deposit Accounts 332
1- Regulations for Opening Personal Deposits
Accounts
332
1/1 Completion of Data, Documents and
Contracts
332
1/2 Customers Data in Forms, Contracts and
Accounts
332
1/3 Documents to be attached to the Account
Opening Forms and Contracts
333
1/4 Contracts to be Concluded 333
1/5 Customer Accounts Statements 334
1/6 Opening more than one main account for a
customer
334
2- Account Opening Procedures 335
2/1 Opening Current Account 335
2/2 Customers are not permitted to use Cheques
for drawing from the Saving Accounts
335
3- Deposits at Islamic Banks/Mudaraba
Percentages and Profit Rates
335
Instructions To Banks – September 2013
Fifteenth Edition September 2013 18
4- Introducing New Type of Deposits 336
5- Opening an Account for Companies Applying for
License to Work in Free Zones of Science and
Technology Oasis
336
6- Resident and Non-Resident Accounts 336
7- Using Personal Accounts for Commercial
Purposes
337
8- Promoting Customer Awareness in the Banking
Sector
338
Third: Marketing Products of Insurance 339
Fourth: Providing Service Counters in Banks for
Persons with Special Needs
341
Fifth: Special Need Customers (Blinds) 342
Sixth: Commissions and Fees on Personal Accounts
and Services
343
1- Limits of Commissions and Fees 343
2- Commission and Fees Disclosure 343
Chapter Five: Dormant Deposits and Unclaimed
Accounts
344
First: General Instructions 345
Second: Dealing with Dormant Deposits and
Unclaimed Accounts
345
1- Dormant Deposits Accounts 345
2- Unclaimed Banking Cheques and Transfers 346
3- Unpaid Shareholders' Profits 347
4- Customers' Accrued and Unpaid Investments 348
5- Other Funds not remitted to Owners 348
6- Contents of Unclaimed Safe Boxes 349
7- General Rules 350
Chapter Six: External Auditor 351
1- Appointing and Changing the External Auditor 352
2- Conditions Required for External Auditor 353
2/1 Registration and License 353
2/2 Professional Efficiency and Experience 353
Instructions To Banks – September 2013
Fifteenth Edition September 2013 19
2/3 Neutrality and Independency 353
2/4 Honesty, Creditability and Secrecy 354
3- External Auditor’s Tasks and Duties 354
4- External Auditor's Responsibilities Towards
QCB
355
5- External Auditor's Reports 356
5/1 The Annual Public Disclosure Report 356
5/2 Quarterly Financial Reports 356
5/3 Internal Control Letters and
"MANAGEMENT LETTERS"
357
6- External Auditor's Special Tasks 357
7- Contracting with External Auditor 357
8- External Auditor for Mutual Funds 358
9- Credit facilities Classification and Provision
Determination (External Auditor)
359
10- Legal Issues related to External auditors 359
Chapter Seven: Banks' Relation with QCB 362
First: Centralizing Banking Credit Risk Reporting 363
Second: Banks' Correspondence with QCB 370
1- The Designation Codes for Supervision and
Control Department
370
2- Regulating Banks' Correspondence with
Supervision and Control Department
370
3- Organizational Structure of the Supervision and
Control Department
370
4- QCB Inspectors' Reports 371
5- Bank’s Organizational Structure 371
6- QCB Organizational Structure 371
Third: License, Registration and Fees - Banks 372
1- License for Banks 372
1/1 Banking License Application Forms 372
1/2 Granting or Rejection of licensing
application
372
1/3 Promulgate the decision to grant the license 372
Instructions To Banks – September 2013
Fifteenth Edition September 2013 20
1/4 The QCB may license foreign financial
institutions to open branches
373
1/5 The financial institution shall commence
conducting the licensed services, businesses or
activities
373
1/6 Amending Licensing conditions 373
1/7 License Renewal 373
2- Fees Received by QCB 373
2/1 Fees Received by QCB according to Annex
no. (26)
373
2/2 Method of Collecting the Annual Fees 373
3- Bank’s Articles of Association and Incorporation 374
4- Main Data for Bank’s Registration 374
5- Opening Branches and ATMs 375
6- Data for Starting Branch Activity and Operating
ATMs
375
7- Revoke or Cease License 375
Fourth: Banks' Working Hours and Official Holidays 376
Fifth: Undertaking from the Headquarters 378
Sixth: Classification of Headquarters and Branches
Activities
379
Seventh: Back Office Activity of Branches of Foreign
Banks
381
Eighth: Security and Safety in Banks and ATMs 383
A- Security and Safety Instructions 383
B- Standards and Specifications of Security
Precautions at Banks and ATMs
387
1- IT Room 387
2- Safe Boxes Room 387
3- Main Branch and Branches 387
4- ATMs 388
C- Controls and Standards of Security
Precautions at Banks and ATMs
389
D- Security Surveillance Systems 391
Instructions To Banks – September 2013
Fifteenth Edition September 2013 21
Ninth: Reporting on Extraordinary Cases to QCB 393
Tenth: Compliance Function 394
Eleventh: Business Continuity 396
A- Business Continuity Plan Guidelines 396
B- Business Continuity Management Guidelines 399
Twelfth: Restricted Activities for Banks 407
Chapter Eight: End of Year Financial Statements and
Additional Instructions
408
First: Monthly Statement of Assets and Liabilities 409
1- Monthly Statement of Assets and Liabilities 409
1/1 Monthly Balance Sheet 409
1/2 Monthly Balance Sheet
Implementation
410
A- Technical Instructions of the
monthly balance sheet
410
B- All banks should comply with the
following
410
C- New amendments have been made
to the monthly balance sheet and
some tables required from bank and
its branches inside Qatar
411
D- Monthly tables attached to the
balance sheet
411
2- End of Year Financial Statements 411
2/1 International Accounting Standards 411
2/2 Accounting Standards for Islamic Banks 415
2/3 Accounting Classification of Deposits at
Banks (Islamic Banks and Islamic Branches of
Commercial Banks)
423
2/4 Evaluation of Shares in Companies
according to Shareholder's Equities (All banks)
425
2/5 Consolidated Financial Statements 425
Second: Calculation and Distribution of Profits between
Depositors and Shareholders of Islamic Banks
430
Instructions To Banks – September 2013
Fifteenth Edition September 2013 22
1- Method for Distributing Profits 430
2- Distribution of Payment out of Profits to
Depositors
431
3- Loss Bearing 431
4- The Ratio of Mudarba and Contracts Signed with
Depositors
431
5- Forms for Non-Objection from QCB 432
Third: Additional Instructions 433
Chapter Nine: Other Banking Issues 436
1- Embezzlement Crimes 437
2- Activities Designed to be Conducted Abroad
(National Banks)
437
3- Cash 437
4- Contracts signed with customers 437
5- Insurance 438
6- Gathering information relating to Basel II
Framework
438
7- The Sole Official Document for Personal
Identification
438
8- Automatic Enrolment 438
9- Arab Union for the Blind 438
10- Warning of Banking Electronic System Breaches 439
11- Shareholders General Assembly (National
Banks)
440
12- ATM Robbery through Electronic Devices 440
13- Naming Contingency Officers 441
14- ATM Fraud 441
15- Fraud Attempts 441
16- Licensed Exchange Houses operating in Syria 442
17- Banks Using Holy Names and Places in Kingdom
of Saudi Arabia
442
18- Other Account Receivables within the Credit
Facilities
442
19- Special Places for QCB Inspectors 443
Instructions To Banks – September 2013
Fifteenth Edition September 2013 23
20- Qatarization of Posts in The Banking
System
443
21- Changing deposits, CDs and Transactions among
Banks
443
22- ATMs for Persons with Special Needs 443
23- Reporting on Stolen Currency Notes 444
24-Presence of Companies’ Representatives Inside
Banks
444
25- Debt Securities Issuance 445
Chapter Ten: Anti-Money Laundering (AML) and
Combating Financing of Terrorism (CFT)
446
First: Regulations 447
1- Legal Basis for the regulations 447
2- Objectives of the regulations 447
3- Definitions 448
4- General Provisions 453
5- Key AML/CFT Principles 454
6- General AML and CFT Responsibilities 454
7- Board of Directors 459
8- Money Laundering Reporting Officer [MLRO]
and Deputy
460
8.1 Appointment 460
8.2 Eligibility to be MLRO and Deputy 461
8.3 General Responsibilities of MLRO 461
8.4 Particular Responsibilities of MLRO &
Deputy
462
8.5 Reporting by MLRO to the Board 462
9- Risk Based Approach 464
9.1 Risk Based Approach – General 464
9.2 Assessment Methodology to mitigate ML/FT
threats
465
9.3 Risk profiling business relationship 465
10- Customer Risk 465
11- Product Risk 468
Instructions To Banks – September 2013
Fifteenth Edition September 2013 24
11.1 Risk assessment of product risk 468
11.2 Policies & procedures for product risk 468
11.3 Products with fictitious, false or no names 468
11.4 Correspondent banking relationships 468
11.5 Shell Banks 470
11.6 Payable Through Accounts 470
11.7 Power of Attorney 471
11.8 Bearer shares and Share warrants to bearer 471
11.9 Wire transfers 471
11.10 Non-profit organization 473
12- Interface or delivery channel risk 474
12.1 Risk assessment for interface risk 474
12.2 Policies and procedures for interface risk 474
12.3 Non-face-to-face business relationship and
New Technology
475
12.4 Reliance on Third Party 475
13- Jurisdiction Risk 476
14- Know Your Customer (KYC) 478
14.1 General Principle of KYC 478
14.2 Customer Acceptance Policy and
procedures
478
14.3 Customer Due Diligence (CDD) – Basic
requirements
479
14.4 General requirements on extent of CDD 480
14.5 General requirements for on-going
monitoring
480
14.6 FIs unable to complete CDD procedure for
customer
481
14.7 Timing of customer due diligence 481
14.8 Circumstances when CDD may be
completed at a later stage
482
15- Customer Identification Documentation 482
16- Enhanced CDD and on-going monitoring 484
17- Simplified Customer due diligence 486
Instructions To Banks – September 2013
Fifteenth Edition September 2013 25
18- Reporting 487
19- Tipping off 490
20- Screening and training requirements 491
21- Documents, Record Keeping and Retention 493
22- Internal & External Auditing 494
23- Sanctions 494
24-Approved forms to be used 494
25- Regulations effective from 494
A- Miscellaneous issues for guidance 494
B- Typologies 497
C- Guidance by International Bodies 498
Second: FATF Statement on AML and CFT 499
Third: Financial Information (FIU) Unit's Guidance
and STR Forms
500
Fourth: National Anti money laundering and Terrorism
Financing Committee Guidance on Mechanism to
revise matching of names, persons, and entities with
Security Council Sanctions Lists
501
Chapter Eleven: Qatar Exchange 502
1- Disclosure of Profit Distributions by Qatar
Exchange
503
2- Controls on Conducting Financial Brokerage
Activity in Qatar Exchange
503
3- Conducting Financial Brokerage Activity in
Qatar Exchange
507
Part Eight Other Instructions 509-517
First: Banks' Correspondences with QCB 510
1- Official Language for Correspondence 510
2- Regulating the banks' Correspondence with QCB 510
3- Response to Correspondences 512
Second: Banking Consumer Services Protection
Department
513
Third: The Law of the QCB and the Regulation of
Financial Institutions (Law no. (13) of 2012)
514
Instructions To Banks – September 2013
Fifteenth Edition September 2013 26
Fourth: FIU Instructions 515
Fifth: Other Instructions 517
1- Ernst & Young Appointment (National Banks) 517
2- Delegation of Liaison Officer 517
3- Imposing Financial fines for delayed and
inaccurate data sent to QCB
517
Part Nine Qatar Credit Bureau 518-522
1- Compliance Officer Nomination 519
2- Appointment of Qatar Credit Bureau CEO and
the Approval of the Organizational Structure
519
3- Compliance officers cooperation with Ernest and
Young
519
4- “eDATE” program Installation and Application 519
5- Qatar Credit Bureau/Credit Reports: 520
6- Data Update/Concealment 521
7- Storage Devices 522
Part Ten Instructions 0f Financial Stability and Statistics 523-536
Instructions of Financial Stability and Statistics
Department
524
1- Data Relating to Financial Stability and
Statistics Department
524
A- Monthly Data 524
B- Quarterly Data 525
C- Consumer loans (Biannual Data) 525
2- Assignment of Liaison Officer in each Bank for
Coordination Purposes
525
3- Establishing Data Base at Financial Stability
Department for Banking System Employees in
Qatar (Biannually)
525
4- Accounts for Charity Purposes (Monthly) 526
5- Banking Lending Survey (Quarterly) 526
6- Transactions outside Qatar (National Banks)
(Quarterly)
526
Instructions To Banks – September 2013
Fifteenth Edition September 2013 27
7- Financial Stability and Statistics Administrative
Structure
526
8- Stress Testing 526
Part Eleven Sanctions and Financial Penalties 537-554
First: Chapter 9 of The Law of the QCB and the
Regulation of Financial Institutions (Law no. (13) of
2012) regarding Sanctions and financial Penalties
538
A- First Chapter: Sanctions 538
B- Second Chapter: Financial Penalties 542
Second: Imposing Sanctions and Financial
Penalties
543
1- Impose Standard Financial Penalties 543
2- 543
2/1 Capital Adequacy of Foreign Branches 543
2/2 Real Estate Financing Controls 543
2/3 Credit against Salary 544
2/4 Finance by Tawaroq 544
2/5 Credit Risk Department 544
2/6 The Ratios of International Financing and
Real Estates Investments (for Islamic Banks)
544
2/7 Liquidity Ratio 545
2/8 Credit Ratio 545
2/9 Overdraft to Credit Facilities Ratio 546
2/10 The Ratio of the Assets in Foreign
Currencies to the Liabilities in Foreign
Currencies
547
3- Procedures for Repurchases Operations
(REPOs)
547
4- Required Reserve Ratio 547
5- Dividend Coupons and Payment Orders issued
by Banks and Companies
548
Instructions To Banks – September 2013
Fifteenth Edition September 2013 28
6- Cheque Issuance, its Legal Form, and Cheques
with no Fund
548
7- Clearing at QCB 548
8- Fines for Electronic Clearing 548
9- Statistics of Balance of Payments 548
10- Non-Negotiable Cheque 549
11- Cash Dealing (Cash deposited at QCB) 549
12- Currency Counting Machines Upgrades 549
13- Mutilate Banknotes 549
14- Security Companies 549
15- Banking Systems Instructions (Banking
Electronic Instructions)
549
16- Overdraft Current Accounts (Islamic Banks) 551
17- Conditions and Documents for Credit
Agreement
552
18- Financing of Subscription in Capital of
Companies under Construction
552
19- Financing Customers’ Trade in Securities 552
20- Interest Risks on Loans 552
21- Credit Facilities granted to Governmental Bodies
and Entities
552
22- Using Personal Accounts for Commercial
Purposes - circular no. (225/2007)
552
23- Anti-money Laundering and Terrorism
Financing
552
24-Corporate Governance for Banks and Financial
Institutions
553
25- Inter-Bank Payments System 553
26-Modern Technology and Electronic Banking
Services Risks
553
Instructions To Banks – September 2013
Fifteenth Edition September 2013 29
27- Commissions and Fees on Personal Banking
Accounts and Services
553
28- Imposing financial fine on delayed and
inaccurate data sent by banks
553
29-Circular no. (63/2011) dated 22/8/2011
(interest/return on credit against salary)
553
30- Bonuses given to Members of Board of
Directors
554
31- Controls and Ceilings on Bank Investments 554
32- Banks Main Registration Data 554
Part Twelve Periodical Data 555-576
First: Capital Adequacy Ratio 556
1- Basel II Capital Adequacy Ratio for National
Banks
556
2- Capital adequacy for Branches of Foreign Banks
computing or not computing Basel Capital
Adequacy Ratio at their H.O.
556
3- Approved Electronic System for Capital
Adequacy
557
4- Capital Adequacy Calculation Reports 557
5- Basel III: Item no. (5) in page no. (155) 557
6- Major Shareholders 557
Second: Credit and Financing Risk 559
1- Provisions for Credits Classified as Substandard,
Doubtful or Bad, and Financial Investment
Evaluation Forms
2- Debts Write off 559
3- Credit Concentrations 559
4- The Overdraft Accounts and the Overdrawn
Accounts (Commercial Banks)
561
5- Real Estate Financing Net Risk Ratio 562
Third: Bank's Investments and Credit Concentration
for Banks and Financial Institutions
563
Instructions To Banks – September 2013
Fifteenth Edition September 2013 30
Credit Concentrations for Banks and Financial
Institutions
563
Fourth: Banking Ratios and Indicators 564
1- Liquidity Ratio and Management 564
2- Credit Ratio 564
3- Overdraft to Credit Facilities Ratio 565
4- The Ratio of International Financing and Real
Estate Investments
565
5- Ratio of assets in Foreign Currencies to
Liabilities in Foreign Currencies
566
6- Cash Flows for Customer Deposits 567
Fifth: Customers' Investments 568
Sixth: Banking Credit Risk System 569
Seventh: End of Year Financial Statements and
Calculation and Distribution of Profits between
Depositors and Shareholders of Islamic Bank
570
1- Assets and Liabilities Monthly Statement 570
2- Consolidated Financial Statements 570
2/1 For Conventional Banks 570
2/2 For Islamic Banks 570
3- Calculation and Distribution of Profit between
Depositors and Shareholders of Islamic Banks
570
4- Financial Statements of Investment Funds 571
Eighth: Other Periodical Data 572
1- Main Data for Bank’s Registration 572
2- Obligatory Reserve Requirement 572
3- Monthly Movement of Defaulted Debts 572
4- Credit Risk System (updated credit risk
management system)
572
5- Financial Stability and Statistics Data 573
5/1 Monthly Data 573
Instructions To Banks – September 2013
Fifteenth Edition September 2013 31
5/2 Quarterly Data (as from the first Quarter of
2009)
574
5/3 Biannual Data 575
6- Consolidated Supervision Instructions on
National Banks, their External Branches and
Subsidiaries
575
7- Treatment of Bad Debits 576
8- Major Shareholders 576
9- Qatarization in the Banking System 576
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