A move by four Arab states to blacklist dozens of figures with alleged links to Qatar could squeeze liquidity at Qatari banks which get a significant amount of their funding from the region.

Qatari banks have around 60 billion riyals ($16 billion) in funding in the form of customer and interbank deposits from other Gulf states, Chiradeep Ghosh, banking analyst at SICO Bahrain, said.

But the United Arab Emirates central bank has ordered local banks to stop dealing with the 59 individuals and 12 entities with alleged links to Qatar and to freeze their assets, state news agency WAM reported late on Friday.

It has also told them to apply enhanced due diligence for any accounts they hold with six Qatari banks, including Qatar National Bank (QNB) which is the Middle East and Africa's largest bank, WAM said in its report

The six banks -- QNB, Qatar Islamic Bank, Qatar International Islamic Bank, Barwa Bank, Masraf Al Rayan and Doha Bank -- did not respond immediately to requests for comment.

Saudi Arabia, the UAE, Egypt and Bahrain had earlier branded as terrorists the same individuals, including Muslim Brotherhood spiritual leader Yousef al-Qaradawi, and entities including Qatari-funded charities Qatar Charity and Eid Charity.

The move followed the isolation of Qatar by the four states, which have cut all diplomatic and transport links.

This pressure is likely to constrain the funding Qatari banks would be able to raise from Saudi Arabia, the UAE and Bahrain, one banker in the region told Reuters.

"All Qatari banks will struggle for liquidity and will have to pay a premium for funding from elsewhere outside these four countries," SICO Bahrain's Ghosh said.

Qatari banks, like their Gulf neighbours, have been struggling against a backdrop of lower oil prices, which has pushed up funding costs and raised non-performing loans.

"It is especially challenging as they're not very liquid as their loan to deposit ratios are already above 100 percent," Ghosh said.

In recent years several have also expanded outside Qatar's small domestic market to grow their business, with QNB holding a presence in several countries including Egypt, Turkey, Nigeria and UAE either directly or via affiliates.

UAE banks would find it relatively easy to comply with the rules as many had invested in improving their compliance systems in recent years and already complied with sanctions against a range of other entities and individuals, another banker said.

Bangladesh Welding Electrodes, a private limited company listed with the stock market, has kept its business activities on a hiatus due to a severe cash crunch.

For several months now, BD Welding's production has remained suspended after the company failed to open a letter of credit due to being a defaulter with Southeast Bank.

The company has now decided to sell off its factory land in Chittagong to pay off Southeast Bank's loan amounting to more than Tk 30 crore, according to a disclosure posted on the Dhaka Stock Exchange website recently. The land was mortgaged to the bank.

Steel giant BSRM, another listed company, will purchase the 2.49 acres of land for Tk 42 crore.

BD Welding will pay Southeast Bank Tk 22.57 crore with the sale proceeds of the land, while the rest of the outstanding amount will be waived by the bank, according to the company.

After paying off the bank loan, the rest of the sale proceeds will be used to shift its production facilities to Dhaka and restart business, said Rafiqul Islam, a director of BD Welding. The company will now purchase land in Dhamrai, Dhaka.

Islam holds the directorial position on behalf of the Investment Corporation of Bangladesh, which accounts for 34.54 percent of BD Welding's stakes. He is also the general manager of ICB.

BD Welding's financial crisis began with a flash flood that damaged its factory, according to Islam.

“The company could not perform well,” said Mohammed Gofran, additional managing director of Southeast Bank.

According to its financial statement, BD Welding incurred loss of Tk 3 crore in the nine months to March this year. Its earnings per share registered a loss of Tk 0.72 during the period.

Until 2010, BD Welding was in the 'A' category of stocks and declared dividends of more than 10 percent.

When it started announcing less than 10 percent dividend, it was downgraded to the 'B' category. In 2015 it was brought down to the 'Z' category as it stopped declaring dividends. Curiously, the company's share price has been on an upward trajectory for the last couple of weeks. It gained Tk 0.4 to close the week at Tk 16.

BD Welding was listed on the stock market in 1999 with paid-up capital of Tk 42.92 crore. As of April, of the total shares, 65.39 percent are held by public, 31.01 percent by sponsor-directors, 2.88 percent by institutions and 0.72 percent by foreign nationals.

Established in 1969, it was the first welding electrode manufacturer in the soil of the then East Pakistan, with its plant and machinery coming from Switzerland.

The plant was taken over by the government in 1973 as abandoned property only for to be divested in 1984. AR Khan, former deputy secretary and founder chairman of BD Welding, purchased the factory by ending up as the highest bidder. Khan continued to run BD Welding as a private limited company until March 1997.

In 1999, it entered the stock market through an initial public offering to raise fund to set up an industrial oxygen plant in Chittagong.