The Arab Emirates began its ascent to the economically developed countries after oil production began on their territory in the 20th century. The rulers of the UAE began to invest in the income generated by the sale of black gold in the development of various sectors that could increase budget revenue: tourism, construction, free economic zones, industry, etc.
Naturally, all this contributed to the rapid development of the banking sector. Today, the financial industry in the UAE is an example for many countries due to its reliability, excellent service, minimal account maintenance fees, and much more. However, it is the successful development of the banking industry that has led to the fact that customers, especially foreigners, cannot choose one of the numerous financial institutions.
What is the banking system of the UAE?
In 1980, the UAE government passed the Federal Law, which outlined the functions of the Central Bank and the activities of financial institutions subordinate to it. And 5 years later, another federal law appeared that regulates the work of Islamic banks.
In addition to the standard of the function for its industry, the Central Bank performs many others, for example, it forms the financial policy of the United Arab Emirates, ensures the stability of their national currency, acts as an adviser to the country’s leadership, etc.
All financial institutions are subordinate to the Central Bank, which can be conditionally divided into 2 groups:
- local organizations that are created on the principle of joint stock communities;
- foreign banks that were able to obtain a license from the Central Bank.
At first, the Central Bank did not skimp on issuing licenses, but soon an overabundance of institutions began to be observed in the banking sector, and the main bank of the country was forced to tighten its policy: for some time, permits for activities were not issued at all and all foreign banks were obliged to limit the number of their branches to eight.
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In general, the banks are expensive and inflexible for most people, compared to the alternatives, which we can introduce, despite the positives that will be mentioned here
Today, the best foreign banks consider it an honor to open their branch in the UAE, since the government does not allow everyone to enter the market. The latest reports say that the number of local banks has reached 23 names, and foreign – 28.
What is the difference between Islamic banks and other financial institutions in the UAE?
It is not by chance that Islamic banks have such a name – they conduct their activities according to Sharia law. For example, they are prohibited from maintaining a strict deposit and credit policy (setting a percentage). Such principles are dictated by the laws of the Koran: usury is condemned and not accepted. Islamic banks try not to allow those involved in the export/import of pork, alcohol, tobacco products into the client base.
The local population with great pleasure entrusts their money to Islamic banks, therefore the government does not prevent their appearance on the market. Moreover, ordinary commercial banks, wishing to expand their clientele, open branches that rely on Sharia law in their work, especially in relation to loans and deposits.
Clients who do not profess Islam are guided by completely different principles when choosing a bank. They are primarily interested in reliability, comfort, and low cost of maintenance. But other factors should also be taken into account. For example, many foreign entrepreneurs are subconsciously drawn to foreign offices. However, such an approach does not always justify itself, since “foreigners” have a much more modest number of operational branches than “natives”. And this factor is really important if you are going to work in the UAE, and not just brag about having an account.
What to look for when choosing a bank in the UAE?
Opening a bank account in Dubai or another region of your choice is quite easy, but the choice of a bank should be taken seriously. Some of the banks charge too much for service, others provide not very convenient Internet banking, and still, others cannot provide their customers with a sufficient number of branches and ATMs.
If you are just looking for a bank to open an account, pay attention to:
- Prestige of the bank and its place in international ratings.
- The list of services that the bank provides and its willingness to add some additional features to its client.
- Is there a minimum amount for opening a deposit?
- Do I need a deposit to get a credit card, and in general, is it possible for a foreigner to get it.
- What documents need to be provided in order to be able to open an account, and how carefully and for a long time they are checked.
- How much will you have to pay for servicing in this bank.
- How many branches and ATMs does the financial institution you like have.
- Are the customers of this bank satisfied with the service (this information is available on thematic forums).
- What annual interest will you receive if you open a deposit account here.
- Transfers to which countries the financial institution does not make, with residents of which states it is not ready to work.
- Is it necessary to have a residence permit to open an account if you cannot count on a resident visa.
- What types of cards and checkbook will you receive if you become their customer.
It only at first glance seems that the list is too large. In fact, upon careful consideration, you will find that it does not take much time to analyze the work of a particular bank according to your requirements.
Dubai Islamic Bank (DIB) Overview
Dubai Islamic Bank (DIB) is an Islamic bank in Dubai founded in 1975 by Haj Saeed bin Ahmed Al Lutah. It is the first Islamic bank to incorporate the principles of Islam into all its activities and is the largest Islamic bank in the UAE.
The bank’s headquarters is located in Dubai. As the first Islamic bank, it acts as the standard-bearer for Sharia-compliant banking provided by other banks around the world and promotes an innovative range of Sharia-compliant products.
Dubai Islamic Bank PJSC provides banking and financial services. It operates in the following segments: consumer banking, corporate banking, real estate development, treasury, and others. The Consumer Banking segment serves SMEs and individual customer deposits and provides consumer and commercial murabaha, salam, ijarah, credit card, and fund transfer facilities, and trade finance facilities.
The Corporate Banking segment deals with financing and other credit facilities, as well as deposit and current accounts for corporate and institutional clients. The Real Estate Development segment includes real estate development and other investments in the real estate of subsidiaries.
The Treasury segment manages general liquidity and market risk and provides treasury services to clients. The ‘Other’ segment includes functions distinct from other core businesses, including investment banking.
All the activities of Dubai Islamic Bank are carried out in accordance with Islamic Sharia law, which prohibits usury.
Leading the evolution of the global Islamic finance industry, DIB is also the world’s first full-service Islamic bank and the third-largest Islamic bank in the world. The Bank currently has 90 branches in the UAE, is present in seven markets around the world, and is expanding its global presence to further the growth and development of the industry. Serving approximately 1.7 million customers, DIB offers its growing customer base an increasingly wide range of innovative Sharia-compliant products and services.
The bank’s strategic focus:
- Expanding the core Islamic consumer and wholesale banking franchise by focusing on product innovation, customer acquisition and penetration, and cross-selling.
- Build and strengthen strategic alliances with sovereign/quasi-sovereign entities, key clients, financial institutions, and key stakeholders to maximize Islamic finance opportunities and ensure DIB leadership in the field.
- Develop a culture of excellence to make DIB the best service provider in its class.
- Expansion of the international presence by expanding the program focused on the markets of the Far East, South and Southeast Asia, the Middle East, Africa and Europe.
Significant subsidiaries and associates of DIB
- Dar Al Sharia: Dar Al-Sharia is a Sharia law and financial consulting firm founded in 2008.
- Dubai Islamic Bank Pakistan: Dubai Islamic Bank Pakistan was established in 2006 as a wholly owned subsidiary.
- Panin Dubai Syariah Bank: A 38.3% stake in a Sharia-compliant player in Indonesia, home to one of the largest Muslim settlements in the world.
- Bank of Khartoum: DIB owns a stake in Bank of Khartoum, one of the largest banks in Sudan.
- Deyaar: Deyaar Development is a development company founded in 2002.
- Bosna Bank International: Bosna Bank International was founded in 2000 as the first Sharia compliant bank in Europe.
- DIB Bank Kenya Limited: Licensed by the Central Bank of Kenya (CBK) in May 2017 to exclusively provide Sharia compliant banking services in Kenya.
Understand the limitations of Evelyn Partners for expatriate financial needs, contrasting with Dubai Islamic Bank’s comprehensive overview of financial solutions.
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