UBF highlights importance of Ijarah of identified tangible assets' standard in strengthening Islamic finance
This came during a session to discuss the Draft of the AAOIFI Shari'ah Standard on 'Ijarah of Identified Tangible Assets', hosted by UBF in Dubai, bringing together leading Islamic banking professionals, and experts in accounting and auditing for Islamic financial institutions. AAOIFI aims to develop this standard as a clear and integrated framework to regulate Ijarah contracts of identified tangible assets.
Mr. Jamal Saleh, Director General of UBF, said: 'With the rapid and significant development witnessed by Islamic banking and financial institutions, the role of AAOIFI in setting the standards and general frameworks for Shari'ah-compliant financial activities becomes increasingly vital. Unified standards are essential to harmonise practices and ensure consistency in banking operations for individuals and institutions.'
He added: 'The discussion around the draft Shari'ah standard on Ijarah of identified tangible assets represents another important step as a result of ongoing constructive dialogue. It promotes exchange of knowledge and experiences and collaboration to establish a unified reference for structuring Ijarah contracts in accordance with Islamic Shari'ah. This strengthens operational integrity and transparency in dealing with customers, and is in line with the vision and initiatives of the Central Bank of the UAE (CBUAE) to enhance governance, risk management, and innovation in Islamic financial institutions, and to reinforce the UAE's position as a global hub for Islamic finance.'
The event included a welcoming remarks and brief introduction of the standard by Dr. Abdurrahman Al Saadi, AAOIFI Shariah Board Secretary and Rapporteur, and two sessions to take comments on exposure draft of AAOIFI Shari'ah Standard on 'Ijarah of Identified Tangible Assets' chaired by Sh. Esam Mohamed Ishaq and Sh. Dr. Osaid Kailani, AAOIFI Shari'ah board members. The importance of this standard is underscored in transactions involving the leasing of vehicles, equipment, real estate, and infrastructure assets, which represent a significant share of Islamic finance activity.
UBF called on all its member banks and financial institutions to carefully review the draft and contribute to its development as a comprehensive and precise framework for product design, contract structuring, and operational procedures related to Ijarah of identified tangible assets.
The Director General of UBF added: 'The UAE is one of the largest and fastest-growing countries in Islamic banking and finance globally. Our Shari'ah-compliant member banks are committed to actively participating in the development of AAOIFI standards through constructive dialogue and full compliance, in line with global best practices, investor protection, and principles of responsible finance.'
He noted that Islamic banking development remains a top priority for UBF. Under the direct supervision of the Central Bank of the UAE, the Federation has contributed to supporting Islamic financial institutions in developing innovative solutions that meet customer needs and enable a competitive, sustainable growth that supports society and the economy.
UBF continues to support AAOIFI's efforts to develop accounting and auditing standards and practices for Islamic financial institutions. This includes issuing relevant standards for banking, investment, and insurance activities to keep pace with industry evolution and meet customer expectations.
About UAE Banks Federation (UBF):
Established in 1982, UAE Banks Federation (UBF), the sole representative and unified voice of UAE banks, comprising 64 members of banks and financial institutions operating in the UAE. UBF advocates the interests of all its members and enhances cooperation and coordination between them in order to elevate the UAE's banking ecosystem for the benefit of members, customers, and the overall UAE economy.
UBF's mission and objectives are focused on representing its members and defending their rights and interest. UBF provides a platform for cooperation and the exchange of ideas and expertise among its members and plays a significant role in raising public awareness about the contributions of the UAE banking sector to the economic and social development of the country.
UBF has a 22-member Advisory Council consisting of CEOs and General Managers from member banks and financial institutions, which oversees the implementation of UBF's policies and activities. The CEOs Council also makes directional decisions through UBF's General Secretariat for UBF's 28 technical and 6 advisory committees, which in turn are tasked to discuss all issues relevant to the UAE banking and financial services ecosystem. UAE Banks Federation also includes a CEOs Consultative Council, which consists of chief executives of other member banks.
For further information, please contact:
Sooyin Lee
UAE Banks Federation
+971 562042254
sooyin@uaebf.ae
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