The UAE Central Bank is planning to create a 'governance unit' that will organise the activities of Shariah-compliant banks and Islamic units at commercial banks in the second largest Arab economy, a newspaper reported on Sunday.
The UAE Banks Union has requested the creation of such a unit with the aim of organising the work of Islamic banks and unifying criteria and laws for their Shariah-compliant banking operations in the country, Alkhaleej said.
“The plan has been prompted by the presence of a gap in such laws…the services at some Islamic banks widely differ from those at other similar banks,”the paper said, quoting what it described as an “informed” banking source.
“This unit will be created and based at the Central Bank and will act as a reference for all Shariah-compliant banks operating in the UAE in case any disputes arise.”
The source said such a body has become essential following a steady and rapid increase in demand for Islamic banking services, adding that such services have grown in the UAE alone by around 20 per cent annually.
According to the source, Islamic units at UAE-based conventional banks have largely expanded over the past years, contributing 10-15 per cent of their total profits.
Eight of UAE’s 51 banks are Shariah-compliant units, with their total assets exceeding Dh200 billion at the end of 2012.
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