Foreign Banking and Financial Institutions in the Uae
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TABLE OF CONTENTS
Content: Page:
Introduction: Adapting to Islamic finance practices ... . 1
Culture-specifics of Islamic finance .. . 1
Basic principles .. . . .. 2
Definition of terms ..... .. 3
The UAE setting .. 5
Regulatory restrictions in Union Law No. (10) of 1980 ... .. 8
Case study: BNP Paribas .. . 11
Conclusion: Islamic banking and finance opportunities in the UAE ... 13
Appendix
Bibliography
1.0 Introduction: Adapting to Islamic finance practices
In the banking and finance sector of the UAE, Islamic finance practices are the law of the land. Foreign banks, financial institutions (FIs) and investment companies licensed to operate in the country have adapted to the norms. Their core operations are geared towards offering products and services tailor-fitted to the local market and, most importantly, compliant with the culture-specific regulations. All their local counterparts, by virtue of Federal Law No- 6 of 1985, are committed to abide by the provisions of the Islamic Sharia Law, the sanctions of which are derived from the Holy Quran and the sayings of the Prophet Muhammad. Central to the standards set by the Law prohibit Islamic financiers from engaging in transactions that involve interest (riba) and speculation (gharar). By adapting to these practices, foreign banking and financial institutions are assured not only of a niche in the local market but of continued opportunities in the UAE.
2.0 Culture-specifics of Islamic finance The philosophy and principles behind Islamic finance are outlined in the Holy Quran and the Sunnah (practices and traditions of the Prophet Muhammad) more than 1,400 years ago. Islamic finance is divergent from conventional banking.
TABLE OF CONTENTS
Content: Page:
Introduction: Adapting to Islamic finance practices ... . 1
Culture-specifics of Islamic finance .. . 1
Basic principles .. . . .. 2
Definition of terms ..... .. 3
The UAE setting .. 5
Regulatory restrictions in Union Law No. (10) of 1980 ... .. 8
Case study: BNP Paribas .. . 11
Conclusion: Islamic banking and finance opportunities in the UAE ... 13
Appendix
Bibliography
1.0 Introduction: Adapting to Islamic finance practices
In the banking and finance sector of the UAE, Islamic finance practices are the law of the land. Foreign banks, financial institutions (FIs) and investment companies licensed to operate in the country have adapted to the norms. Their core operations are geared towards offering products and services tailor-fitted to the local market and, most importantly, compliant with the culture-specific regulations. All their local counterparts, by virtue of Federal Law No- 6 of 1985, are committed to abide by the provisions of the Islamic Sharia Law, the sanctions of which are derived from the Holy Quran and the sayings of the Prophet Muhammad. Central to the standards set by the Law prohibit Islamic financiers from engaging in transactions that involve interest (riba) and speculation (gharar). By adapting to these practices, foreign banking and financial institutions are assured not only of a niche in the local market but of continued opportunities in the UAE.
2.0 Culture-specifics of Islamic finance The philosophy and principles behind Islamic finance are outlined in the Holy Quran and the Sunnah (practices and traditions of the Prophet Muhammad) more than 1,400 years ago. Islamic finance is divergent from conventional banking.
Bibliography: as at 30th September, 2006 No Name of the Bank Head