The UAE is
to establish the world’s first Sharia-compliant trade bank to bolster its ambition to be the centre of the Islamic
economic world.
Sultan bin Saeed Al Mansouri, the economy minister, is also chairman of Dubai Islamic Economy Development Centre. Courtesy The Kimberley Process
The Dubai
Islamic Economy Development Centre (DIEDC), under the new chairmanship of
Sultan bin Saeed Al Mansouri, the Minister of Economy, and the Department of
Economic Development, are in "advanced discussions" with the Central
Bank of the UAE to obtain approval for a wholesale Islamic banking licence for
the new entity, to be called the Emirates Trade Bank.
The talks
are being led by a six-man committee appointed by Sheikh Hamdan bin Mohammed
bin Rashid, Crown Prince of Dubai and chairman of the Executive Council. The
committee’s chairman is Mohammed Al Gergawi, Minister of Cabinet Affairs and
The Future.
A statement
from DIEDC said the new bank would specialise in international trade and
commodity finance. "Emirates Trade Bank will be the first of its kind, a
global Sharia-compliant bank exclusively offering integrated trade and
international commodity financing solutions through leveraging and mobilising
the infrastructure and logistics ecosystem of the UAE.
"The
bank will fulfil Dubai’s strategic goal of supporting the Islamic financial
sector and integrating investments from this domain towards doubling UAE trade
flows, which stood at about Dh1.4 trillion in 2014, by 2020," it added.
Sami Al
Qamzi, the director general of Dubai Department of Economic Development and
vice chairman of DIEDC, said: "The UAE in general and Dubai in particular
are privileged to have a diversified, open and flexible economy capable of
addressing international and regional challenges.
He added:
"Emirates Trade Bank is set to reap synergies from the strategic
positioning and advanced technical and logistics’ infrastructure of Dubai in
its efforts to finance international trade and commodity flows, particularly
through the UAE."
Speaking on
the sidelines of the Global Islamic Economy Summit in Dubai, Abdulla Al Awar,
the DIEDC’s chief executive, said: "This is the first time such a bank –
Sharia -compliant and focused on trade finance – has been envisaged.
It can
revolutionise trade in halal products and will complement the initiatives we
have already launched on standardisation and harmonisation.
"It
will enhance trade finance between countries in the Arabian Gulf region, in
central Asia and in Africa. It will be a new source of liquidity for trading
between Islamic countries."
The value of
the global Islamic economy last year was recently put at US$1.9 trillion by the
international information group Thomson Reuters. Global trade in halal food
alone is expected to approach $2tn by 2020, it was estimated.
Talks with
the Central Bank are believed to be focused on how to capitalise the new bank.
Equity participation from the private banking sector is one of the propositions
being discussed.
The
statement said: "DIEDC will continue to support initiatives aimed at
transforming Dubai into the capital of the Islamic economy.
"The
UAE and the emirate of Dubai have always been the leaders and pioneers in the
Islamic finance industry, with the establishment of the first Islamic bank in
the world in the 1970s."
The other
members of the committee are: Essa Kazim, the Governor of Dubai International
Financial Centre and the secretary general of DIEDC; Hussain Al Qemzi, a board
member of DIEDC and the chief executive of Noor Bank; Ahmed Al Janahi, the deputy
chief executive of Noor Bank; and Saed Al Awadi, the chief executive of Dubai
Export Development Corporation.
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