Islamic Finance vs. Conventional Finance in UAE
We are living in an age where everything is linked to banking and financing. From…
The United Arab Emirates is composed of seven emirates. Of the seven, much is known about Dubai and Abu Dhabi. Dubai, dubbed the Paris of the Middle East made headlines years ago when it embarked on ambitious and ritzy infrastructure projects like a man-made island surrounded by a blue sea, an indoor skiing place, buildings that almost reach the sky, and others. Among other banks, HSBC, the largest bank in Europe, put in more than 17 billion pounds in investment. But due to the worldwide economic slump, some of these projects are put on hold. But not to worry, the banking and investment climate in the U.A.E. remain healthy and sound. To pay off its debts, Dubai World sold some of its prized assets. Abu Dhabi, on its part, has a rather conservative approach towards modernization. With its vast oil reserves, Abu Dhabi will most likely outpace Dubai in terms of balance growth and development.
Banks in the United Arab Emirates compete with each other in making more profits for the investor. But they also help each other in times of need.
For instance, the U.A.E acted decisively and pragmatically (according to Peter Sands, chief executive of Standard Chartered Bank) in offering a rescue package to Nakheel, Dubai World’s real estate developer which incurred 59 billion dollars worth of loans to major European and American banks. Abu Dhabi, Dubai’s next door neighbor also chipped in a size-able amount in rescuing Dubai World.
This happened in 2008, in what was considered an economic slump. But since that time and starting 2012, the banks have turned their losses into profits. They have learned lessons from that experience. They are currently poised to offer banking services to the investors all over the world but more so to the Islamic investors who see in the U.A.E not only a chance to make their money grow but also to develop this place in the world. Once sleepy fishing villages and arid deserts populated by Bedouins, now these places can out rival any sophisticated place in the world like Paris, New York or London. Actors, football players, Russian oligarchs all have investments and residences in the U.A.E.
Banking services in the U.A.E. are at par with the banking services of other banks in the western world. All the banks in the U.A.E. provide Internet banking for all banking accounts. Depositors can also put their money in fixed deposits in banks like the First Gulf Bank, NBAD and ADCB. In addition, these banks provide a series of gold and platinum credit cards where you can avail discounts and offers based on the kind of credit card you are having.
All the banks offer a variety of account like current account, savings account and others.
The Dubai Islamic Bank has the most unique feature not found in other banks. It has services just for women, and a salary-in-advance option. The just-for-women service is important since Islamic or Muslim culture has strict laws about men and women being found in similar places at the same time. It has a remittance service to Pakistan and is considered one of the most ethical banks in the Middle East.
No matter what Islamic bank you choose to do business with in the United Arab Emirates, you can be sure that your money is in good hands.
In this article, we will discuss the new paradigm shift in banking sector in UAE which has amazed the financial analyst and amazed the public. Yes, we are talking about none but Islamic Banking. Penetrating into market in 1970`s, it gained huge popularity in West as well as East and often termed as Ethical Banking.
Around 75 countries contains Islamic banks out of which 50% are non-Muslim states which shows a clear sign of the huge success of Islamic Banking. The rate of adopting this new trend increased after the recent economic downturn as well when people get to know such financial system where no one party can be benefitted over another. And it creates mutual benefits and welfare for the overall society.
And to be more specific, talking about UAE, the Government is thinking of the law similar to Pakistan which states to open an Islamic Business line as well in your portfolio once you are setting up any financial institution in UAE.
These facts together with the benefits mentioned above clearly shows how much Islamic banking is better for individuals as well as for the society as a whole.