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29 March 2024

UAE to set up fund for Islamic banks

UAE to set up fund for Islamic banks. (EB FILE)

Published
By CL Jose

The UAE Central Bank is said to be working on a Shariah-compliant liquidity window to help Islamic banks access their short-term funding needs.

A committee set up to look into the needs of Islamic banks in the UAE has also stated that it is working on a Shariah instrument to substitute certificates of deposits, which is used by conventional banks to park their short-term surplus funds with the Central Bank.

Mohammed Saleem, member of the committee and Executive Vice-President and Chief of Treasury, Dubai Islamic Bank, said currently Islamic banks buy CDs on 'zero' interest. The new liquidity window will address the contingency fund requirements of Islamic banks.