UAE commercial transactions law ‘to boost Islamic banking services’
The Federation, which acts as the unified voice of UAE banks, stated that the new law meets the requirements of the great and rapid development witnessed by Islamic banks and financial institutions and opens the doors to more Islamic sharia-compliant financial services, which reinforces the UAE’s leading position in Islamic banking.
The statistics of the Central Bank of the UAE reflect the significant growth of Islamic banks operating in the country, as their assets exceeded AED600 billion by the end of the first half of 2022.
Their bank credit facilities surged to AED395.4 billion, up 2.1% over the same period in 2021, while the deposits rose to AED430.7 billion, and the total investments of Islamic banks amounted to AED95.4 billion by the end of June 2022.
The law, of which Chapter VI is singled out for commercial transactions of Islamic financial institutions, provides a comprehensive and advanced legislative framework for banking transactions that are compliant with the provisions of Islamic Sharia.
It is considered the first of its kind in addressing Islamic financial and banking transactions.
The law has 25 articles that define the concepts and financing formulas, deposits, investment accounts, Takaful insurance, investments and other transactions that are subject to the provisions of sharia in a detailed and accurate manner, it stated.
UBF Chairman Abdul Aziz Al Ghurair said: “The Federal Law for Commercial Transactions 2022 confirms the futuristic and comprehensive vision of our wise leadership, which has contributed to reaffirming the UAE’s position among the most prominent economic and financial centers in the world.”
“Financial and banking services that are in compliance with the provisions of Islamic Sharia are among the sectors that have found great interest in the UAE and have witnessed remarkable development over the past years under the wise guidance and oversight of the Central Bank of the UAE,” he noted.
According to him, the Federation places the development of Islamic banking services among its top priorities.
“Under the direct supervision of the Central Bank of the UAE, UBF has contributed to supporting Islamic financial institutions as part of its efforts to represent member banks in the federation and the banking sector,” noted Al Ghurair.
“This is part of our role to enhance cooperation and interaction between member banks on common issues thus providing an effective platform for the exchange of ideas, opinions and information while leading efforts to devise solutions that meet customer needs and enable banks to build and develop sustainable competitive businesses that support the UAE society and economy,” he added.