The Problem of Interest on Bank Loans in Qatari Law: An Analytical Study

Dr. Mohamed Abou El Farag
Associate Professor of Commercial Law
College of Law – Qatar University
Dr. Tarek Rashed
Associate Professor of Civil Law
College of Law – Qatar University


This paper discusses important legal problems relating to the adoption by the Qatari judiciary of a position on the issue of interest on bank loans, namely, that banks should not take interest on loans granted to clients. Perhaps, the reason for adopting such a position is the lack of any legal regulation of bank loans to enable them that allows for charging interest on loans they grant, unlike what is prevalent in comparative legislation such as those in the United Arab Emirates and the State of Kuwait.
This study examines the legal system of bank loans in comparative legislation and analyzes the judgments issued by the Qatari judiciary regarding the subject matter of the study. It emphasizes that Article 70 of the Central Bank of Qatar and the Regulation of Financial Institutions (Law no. (13) of 2012) have been representing the legal basis for the legality of banks> agreements with their customers on bank loans interests. It also highlights its disagreement with the decisions issued by the Qatari Court of Cassation that decided the illegality of interest on bank loans and decided to apply the provisions of the Civil Code of Qatar to grant compensation to banks because of the borrower>s late repayment of debt.
Keywords: Banking Loans, Interests, Law of Qatar Central Bank, Qatari Judiciary Rulings, Banking Credit, Civil Loans.

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