UAE gives in to Qatar pressure, closes FAB operations

UAE based bank, FAB has announced the closure of its Qatar operations after increased pressure from Qatar for alleged manipulation of the Qatari riyal.

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 News Desk |

The First Abu Dhabi Bank (FAB) in a statement issued on Wednesday has announced its decision to close its Qatar operations.

The statement issued by the bank stated that the decision was a result of “many months of baseless actions by the QFCRA that have made it impossible for FAB’s operations to continue in Qatar.”

The decision to close FAB’s Qatar operations has come a week after Qatar Financial Center Regulatory Authority (QFCRA) had tightened regulations on the UAE-based lender for alleged manipulation of the Qatari Riyal

The QFCRA had probed into the matter of alleged manipulation that according to the authority was an attempt to devalue its national currency in the international market.

Additional restrictions by the QFCRA on FAB:

Earlier this month the QFCR had imposed strict measures on FAB to prohibit it from undertaking news business deals for customers in Doha.

The bank branch operating in the free zone of the QFCRA in Doha was barred from making new customers by restricting its services. It had however allowed it to provide services to its existing customers.

The Saudi-Emirati led collation had accused Qatar of supporting Islamist groups

These additional restrictions imposed on FAB had come months after the QFCA had requested it to present documents relevant to the investigation regarding currency manipulation earlier this year. However, on failing to produce the documents, the QFCRA decided to tighten its measures on the bank.

Qatar has always kept its currency pegged at a fixed rate to the US dollar, however, since the economic and political blockade imposed on Qatar by its neighboring Gulf states including Saudi Arabia, UAE, Bahrain and Egypt, the currency is said to have traded lower than the usual exchange rate in the international market.

Read more: ICJ denies UAE’s request to coerce Qatar

The suspicion is mainly based on the currency devaluation after the blockade was imposed in 2017. The Saudi-Emirati led collation had accused Qatar of supporting Islamist groups; an accusation denied by Qatar. The blockade has since continued with no signs of reconciliation.

Tensions in the Gulf continue..

The Saudi Foreign Minister, Ibrahim Abdulaziz Al-Assaf in a statement had said that Saudi Arabia would consider to initiate cordial ties with Qatar only if it comes to the “right path” last month during the proceedings of the Mecca Summits. Qatari Prime Minister had visited Saudi Arabia first time since the  blockade to attend the three-day summits on the invitation of King Salman of the Kingdom of Saudi Arabia.

The Qatari Foreign Minister Mohammed bin Abdulrahman al-Thani in an interview following the Mecca Summits stated that Qatar had rejected the final proceedings of the summits as they did not reflect the true values of the Gulf Cooperation Council (GCC) and had solely aimed at isolating Iran.