DOHA: The Ministry of Finance has set up a credit bureau for government and semi-government organisations and their subsidiaries to assess their creditworthiness.
The bureau would then recommend to banks and financial institutions if credit facilities can be extended to or renewed for these organisations, including ministries, and their subsidiaries or not.
The said bureau is the government version of a centralised bureau supervised by the Qatar Central Bank (QCB) that exists for individual and corporate borrowers.
In a circular, the QCB has asked all banks and financial institutions to directly contact the bureau if a government or quasi-state organisation or any of their subsidiaries approach it for a loan facility or its renewal.
“No loan facility is to be extended to or renewed for any state or semi-organisation or its subsidiary unless the bureau gives a go-ahead,” says the QCB circular, number 67 of 2013 dated September 9, 2013. The rule applies even to companies or institutions or agencies in which the government has a controlling stake of 50 percent and above.
The banks have been asked to retain the approval of the finance ministry’s credit bureau for the scrutiny of QCB inspectors as well as from officials of the State Audit Bureau. The QCB circular, however, says the condition doesn’t apply to Qatar Petroleum (QP) and its subsidiaries.
The collaterals that are related to credit lines for the export and import operations of QP and its subsidiaries are exempt from the rule. They can be given credit facilities or their facilities can be renewed directly.
Approvals from the bureau would, however, doesn’t mean that banks and financial institutions should ignore the prerequisites of lending to government entities that are enshrined in their guidebook, the circular cautioned.
The bureau must be contacted within 10 days from receiving a loan or loan renewal request from a government or semi-government body, including their subsidiaries.
The circular, signed by the QCB governor, says violations of the directives would attract punitive action against the senior managements of banks and financial institutions.