(MENAFN -Khaleej Times) dubai plans to set up world?s first shariah-compliant export and import bank
Dubai is exploring the viability of setting up an export and import [exim] bank based on islamic finance principles to further bolster the emirate’s flourishing global non-oil trade that scaled a new peak with a dh94 billion jump in 2013 to hit dh1.329 trillion in value.
Dubai’s department of economic development (ded) on wednesday said it has enlisted noor investment group to conduct a feasibility study for the exim bank project, which would adhere to shariah-compliant rules. islamic finance avoids charging and receiving interest and also bans investing in sectors such as gambling that are deemed unethical according to religious norms.
The creation of an exim bank is aimed at assisting businesses in the uae to grow their trade flows by providing risk mitigation, financing and market access, ded said in a statement. “it is worth mentioning that proposed exim bank will be the first shariah-compliant bank of its kind in the whole world,” said ahmed al janahi, deputy chief executive of noor investment group.
Dubai’s non-oil foreign trade grew eight per cent last year that exceeded twice the wto’s 2.5 per cent global trade growth forecast. the buoyancy in foreign trade also underscored the all-round economic buoyancy as well as the increased diversity of the emirate’s export and import markets. during 2013, dubai maintained a relative diversity in its external markets. as a result, foreign trade with the top five trading partners, including india, china, the usa, saudi arabia and the uk reached dh468 billion, while rest of the partners accounted for a combined dh861 billion.
The proposed bank will deal directly with international bodies and organisations and other exim banks around the work to promote uae trade. it will also coordinate with local authorities, regulators and companies in the trade sector to enhance cooperation.
sami dhaen al qamzi, director-general of dubai ded, said dubai has one of the best infrastructures to serve as a regional hub for international trade flows.
“it is our aim to double trade flows over the next five years. the exim bank, aligned to some of the best global operating models, will support the achievement of this objective and enhance our existing position,” said al qamzi.
Al janahi said a dedicated team from noor investment group is conducting the initial financial, administrative and marketing studies for the project. “the exim bank will focus on enhancing dubai’s international trade as we move towards expo 2020,” he said.
Shaikh hamdan bin mohammed bin rashid al maktoum, crown prince of dubai and chairman of dubai executive council, recently said that the better performance of the non-oil trade sector underscored the vibrant growth across all economic sectors of dubai in particular and the uae in general. he also indicated that dubai is taking huge leaps ahead with the announcement of the ‘smart dubai’ initiative, which aims to raise the bar in enhancing the overall performance of the government sectors and boost the economic sector in particular.
Shaikh hamdan also called on leaders and executives in dubai government sectors to leave no stone unturned in search for fresh opportunities to further strengthen performance and set dubai as an international benchmark for development and prosperity in addition to its role as a key link in global trade routes.
In 2013, dubai’s imports surged dh74 billion to dh811 billion in 2013 from dh737 billion in 2012. exports and re-exports increased by dh20 billion to dh518 billion compared to dh498 billion in 2012.
Dubai’s direct trade rose to dh846 billion, up from dh808 billion. dubai free zones trade volume recorded dh467 billion, compared to dh417 billion. customs warehouse trade went up from dh10 billion to dh16 billion.