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24/10/23
From Features
Islamic Finance
United Arab Emirates
United Arab Emirates: The Dynamic Development Of Islamic Finance
Mazin Khalil
Grant Thornton UAE
Samer Hijazi
Grant Thornton UAE
Islamic finance has emerged as a pivotal sector in the United Arab Emirates (UAE) over the past few decades, transforming the financial landscape and attracting global attention. Rooted in Islamic principles, this distinctive financial system has experienced remarkable growth in the UAE, positioning the country as a leading hub for Sharia-compliant banking and investment. This article delves into the intriguing journey of Islamic finance within the UAE, examining its historical evolution, regulatory framework, key players, and its role in shaping the nation's financial future.
As the global economy grapples with economic uncertainties, Islamic finance offers a unique perspective on financial transactions. Its adherence to Sharia principles, including the prohibition of interest (riba) and the promotion of risk-sharing and ethical investing, has not only provided alternative avenues for investors but also established the UAE as a global hub for Islamic finance innovation.
At the heart of the UAE's Islamic finance regulatory framework lies a commitment to Sharia compliance. Financial institutions offering Islamic products and services are rigorously scrutinised to ensure they adhere to Islamic principles.
Dynamic Development
The UAE's journey towards becoming a global Islamic finance hub can be attributed to pioneering institutions like Dubai Islamic Bank (DIB), which was established in 1975 as the world's first Islamic bank. DIB's success set the stage for the development of numerous other Islamic banks and financial institutions in the country.
Market Di…
Jersey: A Hub For Sustainable Islamic Finance
Jersey has been a leading international finance centre (IFC) for over 60 years. Jersey’s place as a…
ESG
Islamic Finance And ESG In The UK: An Opportunity For The Taking
Adrienne Fisher
CMS, Sheffield
Simon Johnston
CMS Cameron McKenna Nabarro Olswang LLP
Stuart Helmer
CMS, London
Islamic finance remains a relatively niche area of finance in the UK market. Its growth has been reasonably temperate since the 2000s. However, the pressing need to move towards a more sustainable world has seen ESG initiatives come to the forefront of the corporate agenda. We can scarcely get through a week without some new legislative change, government guidance, or environmental catastrophe. This sobering landscape may be the catalyst for Islamic finance to address these challenges.
Islamic finance has key principles that align with current ESG trends and may facilitate the implementation of ESG in the UK finance market. These principles are based on Sharia law and dictate what type of investments financiers can fund and how they can generate income. We have set out three key ESG-related trends (concerns of greenwashing, sustainable assets, and sustainable projects) that are prevalent in the UK, as well as how three principles of Islamic finance (ethical investments, sharing, and managing risk and surety) can help complement them.
Greenwashing And Ethical Investments
Greenwashing is an increasing global concern and the UK is no exception. Corporate bodies are understandably trying to build goodwill with customers by demonstrating their contributions towards a greener future. However, in an area combining technical complexity with high levels of public concern, it is easy for businesses to mislead the public, whether by exaggerating their environmental performanc…
