Government support key for Islamic finance growth in UAE – experts

Government support in terms of regulations and standardisation is key for the growth of Islamic economy in the United Arab Emirates, according to experts.

Speaking at the Global Islamic Economy Summit in Dubai, group chief executive of Abu Dhabi Islamic Bank Tirad Mahmood stated that Malaysia has remained the number one Islamic economy primarily because of government support.

The UAE could also benefit from similar initiatives, he said.

“With the governor of the UAE central bank expressing his intent to create a more hospitable environment to help promote Islamic finance, I think it’s the first step in the right direction,” he added.

The UAE – specifically Dubai is aiming to become a global hub for the Islamic economy by 2020. The emirate plans to emphasise on sectors such as banking and asset management, halal products and certifications, fashion, art, education and tourism.

According to a new report by Thomson Reuters and Dubai authorities, the UAE already has the second most developed Islamic economy ecosystem following Malaysia.

The country ranked high on indicators such as halal travel, halal media and recreation, modest fashion and Islamic finance.

Also speaking at the event, group CEO of Dubai Islamic Bank Adnan Chilwan expressed confidence in the UAE market.

“If you look at the progress that Dubai has made since 2013 as opposed to the last 33 odd years since Islamic banking came into existence, I think we have started to run at a record speed. Today NASDAQ Dubai has become the largest exchange that has an Islamic sukuk system and that’s only because there is passion and a sense of direction.”

In July this year Dubai became the world’s largest centre for Islamic bonds overtaking rival financial centres. Sukuk listing rose to $36.7bn ahead of Malaysia ($26.6bn) for the first time.

“Islamic finance has a lot of potential and a long way to go. If we compare our share to global banking we are still a very small market and to grow we have to be provided with something different [legislations and regulations],” added group CEO of Emirates Islamic Bank Jamal Bin Ghalaita.