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UAE plans to double Islamic bank assets

By Pramod Kumar
A branch of Emirates Islamic Bank. The UAE is keen to increase the assets held by its Islamic banks Alamy via Reuters
A branch of Emirates Islamic Bank. The UAE is keen to increase the assets held by its Islamic banks

The UAE has approved a new strategy that aims to more than double the assets of its Islamic banks in the next six years.

The government aims to increase the assets of Islamic banks from AED986 billion ($268 billion) to AED2.56 trillion by 2031, state-run news agency Wam quoted vice president and prime minister Sheikh Mohammed bin Rashid Al Maktoum as saying.

Sharia compliant investments follow Islamic law and set clear guidelines on permissible financial activities. These rules prohibit practices that involve riba (interest), gharar (excessive uncertainty) and haram activities such as gambling and alcohol.

The target is also to increase the value of listed Islamic sukuk in the UAE to more than AED660 billion, he said.

A sukuk is an Islamic financial certificate, similar to a bond in Western finance, that is sharia compliant.

The government has approved the formation of a committee chaired by the central bank governor to implement the strategy as part of its economic diversification plan.

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