The United Arab Emirates (UAE) will soon be home to the first-ever international bank dedicated purely to Sharia-compliant trade finance products.
A 12 October statement from the Dubai Islamic Economy Development Centre (DIEDC) said that the forthcoming Emirates Trade Bank will exclusively offer “integrated trade and commodity financing solutions, through leveraging and mobilising the infrastructure and logistics ecosystem of the UAE”.
DIEDC noted that the new bank – which is awaiting regulatory approval – will be the first of its kind. Its long-term aims will be to “fulfil Dubai’s strategic goal of supporting the Islamic financial sector”, channelling investments from that domain towards doubling UAE trade flows by 2020.
In 2014, those flows stood at about AED1.4 trillion.
Sami Al Qamzi, DIEDC vice chairman and director general of Dubai Department of Economic Development, 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.
“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.”
DIEDC added that it “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.”
DIEDC chief executive Abdulla Al Awar told UAE journal The National: “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.”
Al Awar stressed that the new bank has been planned with a broad geographical remit in mind, noting that it will enhance trade finance not only between countries in the Arabian Gulf, but those of central Asia and Africa. “It will be a new source of liquidity for trading between Islamic countries,” he said.
Set up in 2013 by Dubai’s Crown Prince, Hamdan bin Mohammed Bin Rashid Al Maktoum, DIEDC was designed to bolster the Emirate’s role as a global hub for the Islamic economy.
In addition to promoting halal industries, the body works to enhance the UAE’s digital infrastructure and open up opportunities for Islamic tourism, arts and culture. It also safeguards Islamic standards in the region’s commercial environment.