By IINA
Abu Dhabi : The United Arab Emirates plans to replace the federal law issued in 1985 with a new one establishing a higher Sharia Council to supervise Islamic finance activities in accordance with Islamic precepts, a top official said yesterday. “It has been a very long time since this law was introduced, and experience has proven that the individual Sharia boards within the Islamic financial institutions are more efficient,” Obaid Humaid Al Tayer, UAE Minister of State for Financial Affairs, told the Federal National Council (FNC). With the rapid expansion of Islamic banks, the UAE is becoming a centre for Islamic finance.
Islamic banks have grown from two in 2000 to seven in 2007, and we are still considering licensing the conversion of some institutions, and only one new license for the emirate of Ajman was issued, while the number of Islamic investment companies has grown from one in 2000 to ten in 2007. “This shows that the sector is growing consistently,” Sultan bin Nasser Al Suwaidi, governor of the UAE Central Bank, said. In terms of assets and liabilities, Islamic banks account for Dh 170 billion of total banking assets, or 13.5 percent, a ratio similar to that of Malaysia ,” Gulf News quoted him as saying.
“As a central bank we would rather not interfere in the operations of Islamic banks; we only monitor errors and risks while applying internationally recognized standards, providing for periodic inspection reports, and we did not recognize any risks or wrongdoing in the activities of the Sharia boards within Islamic financial institutions,” Al Suwaidi told the FNC. Replying to a question by an FNC member, Al Tayer requested a detailed discussion on the country’s monetary policy, especially pegging the dirham to the dollar at a closed session.