Loans

Under QCB rules, the default period for a substandard loan is three months or more, for a doubtful loan six months, and a bad loan nine months. Banks have to closely monitor loan disbursement and forward reports on customer creditworthiness to QCB. There is also a duty to track and follow defaulting customers and seek resolution – if this fails, they will take legal action. Non‑payment of loans could lead to a travel ban for Qatar and possibly the GCC.

QCB has imposed ceilings on the amounts a bank can lend as a personal loan to citizens and expatriates. Banks cannot lend more than QAR400,000 to an expatriate, over a maximum repayment period of 48 months, against a maximum 50% of total monthly salary, and at a maximum 6.5% interest rate. For Qatari citizens there is a maximum loan of QAR2 mn over a maximum 72 months. Banks cannot use post‑dated cheques for the loan value.

Mortgages

New rules were introduced by QCB in July 2023, to be applied by Qatari banks and subsidiaries within the country. Branches and subsidiaries of Qatari banks outside the State of Qatar should comply with the instructions and conditions of the host regulatory authorities as long as the collaterals and financed properties are outside the country.

There are three categories:

1. Ready and under construction residential properties for individuals, whose repayment sources are linked to the client’s own sources, salary or any other non-real estate sources:

  • For Qataris, proprieties up to QAR6 mn – maximum loan-to-value (LTV) of 80% and max tenure of 30 years; above QAR6 mn – max LTV 75%, max tenure 30 years.
  • For residents, for properties up to QAR6 mn – max LTV 75%, max tenure 25 years; above QAR6 mn max LTV 70%, max tenure 25 years.

2. Financing ready properties for individuals and companies for investment and commercial purposes, with the repayment depending mainly on real estate revenues:

  • For Qatari citizens and companies, which Qatari partners own not less than 51%, for property value up to QAR10 mn – max LTV 75%, max tenure 25 years; over QAR10mn – max LTV 70%, max tenure 25 years.
  • For residents (individuals or companies), for property value up to QAR10 mn – max LTV 70%, max tenure 25 years; over QAR10 mn – max LTV 65%, max tenure 25 years.
  • For non-residents, property value up to QAR10 mn – max LTV 60%, max tenure 20 years; over QAR10 mn – max LTV 60%, max tenure 15 years.

3.  Financing real estate under construction for investment and commercial purposes with the repayment depending on the property revenues in whole or in part:

  • For Qatari citizens and companies, which Qatari partners own not less than 51% – max LTV 60%, max tenure 20 years.
  • Foreigners (residents and non-resident) – max LTV 50%, max tenure 15 years.

QCB rules for granting mortgages for salary customers states the debt burden ratio should not exceed 75% of the total salary for Qataris, and 50% for expatriates.

If the customer obtains permanent residence in Qatar as a result of owning the property, the mortgage providers can extend the tenure to be similar to that of residents.

The amendments also state that for under-construction property financing, the grace period, if granted, should not exceed three years and be within the overall tenure, with regular interest payments during this period on a monthly or quarterly basis.

Documents usually required:

  • Valuation Report from an approved real estate agent
  • Salary assignment letter if the home loan is the first facility with the bank
  • ID for Qataris or passport and valid residence card for expatriates
  • Copy of the Title Deed and map
  • Building insurance cover.

Discuss provision for life assurance against any loan amount taken and consider updating your will.

Bank Charges

Banks must prominently display all interest rates on personal loans and credit cards, as well as publish them in local newspapers.

Credit Cards

A maximum 12% annual interest rate and usually only issued when customers transfer their salary or have an adequate deposit at the bank.

Interest Rates

Announced by QCB on overnight deposit and loan transactions between QCB and local banks via the Qatar Money Market Rate Standing Facility, a monetary instrument through which local banks can request access to loan and deposit facilities with QCB at daily interest rates. QCB and Bloomberg jointly launched the first Qatar interbank offer rate (QIBOR) fixing in 2012. This is the interest rate charged by banks in Qatar for interbank transactions.

Given the fixed parity between the Qatari riyal and the US dollar, QCB short term interest rates policies are subordinated to the fixed exchange rate policy, making QCB overnight interest rates closely related to its USD counterpart, the Fed Funds Rate.

Following adjustments by the US Federal Reserve, in July 2023 QCB increased the overnight lending to 6.25%, the deposit rate to 5.75% and the repo rate to 6%.