Dubai, UAE—April 18, 2025: Islamic banking in the United Arab Emirates commemorates a milestone. Additionally, it celebrates 50 years of success and progress. This milestone reinforces that UAE Leads the World in Islamic Banking.
The Growth Story of Islamic Banking in the UAE
Islamic banking in the UAE began in 1975 with Dubai Islamic Bank, the world’s first Islamic commercial bank. Consequently, this started a new era of banking in the nation. Since then, Islamic banking grew rapidly. The UAE now hosts nine specialist Islamic banks and 17 windows operated by mainstream banks. Moreover, the worth of these assets is well over $163 billion.
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The UAE government leads finance and banking. The federal law for Islamic banks, and the Higher Shari’ah Authority, were introduced in 1985 to ensure banks follow Sharia. Finance and banking gained momentum steadily, backed by a strong regulatory environment and customers’ trust.
Finance & banking operations in the UAE first started by offering simple products of retail banking such as savings, current accounts, personal lending, and home lending. Later, the service extended itself to cover corporate banking, investment banking, wealth management, as well as asset management. These many products have attracted individuals as well as businesses looking for ethical as well as Sharia-compliant products.
Milestones and Achievements in Islamic Banking
The banking of the UAE has had many milestones within the past 50 years.
In 1979, its first takaful (Islamic insurance) company opened.
Additionally, the Dubai Government issued its first sukuk (Islamic bond).
It provided a conduit for further sukuk issuances within the UAE and the region.
In 2013, Dubai aimed to be the Capital of the Islamic Economy.
Moreover, this was another push for growth in the sector.
The UAE is a leader in sustainable Islamic finance.
In 2018, its first sustainability-linked Islamic funding occurred.
Subsequently, the first corporate green sukuk issuance followed in 2019.
These steps prove the industry’s dedication to Sharia.
Additionally, they show environmental consciousness.
There is growth in UAE Islamic banking driven by technology innovation. Additionally, online portals as well as mobile applications have been introduced by banks. This enables customers to manage banking facilities easily. Moreover, Islamic banks have created products as well as services through collaborations with FinTech, thus propelling Islamic banking further.
The UAE Islamic banking segment is increasingly being eyed by international players.
Additionally, a number of international Islamic banks have set up their branches in the UAE.
They are attracted by the country’s good regulation as well as its massive customer base.
Consequently, the segment is further preferred by the affluent.
They invest in Sharia-compliant wealth management as well as private banking.
UAE Islamic Finance Milestones
| Year | Milestone |
|---|---|
| 1975 | Dubai Islamic Bank established – world’s first Islamic commercial bank |
| 1979 | First takaful insurance company (SALAMA) established |
| 1985 | UAE banking law and Higher Shari’ah Authority introduced |
| 1988 | Abu Dhabi Islamic Bank established |
| 2002 | Sharjah Islamic Bank launched |
| 2004 | First sovereign sukuk issued by Government of Dubai |
| 2013 | Dubai launches “Capital of the Islamic Economy” initiative |
| 2018 | First sustainability-linked Islamic financing in the Middle East |
| 2019 | First corporate green sukuk issued in the Middle East |
| 2020 | Merger of Dubai Islamic Bank and Noor Bank |
| 2022 | Debut of sustainable sukuk by a UAE Islamic bank |
| 2023 | Launch of local-currency Treasury sukuk by UAE government |
The Future of Islamic Banking in the UAE
Islamic banking in the UAE is set for further expansion over the next few years.
Additionally, UAE finance & banking is well-supported by a strong legal framework.
There is a growing need for Islamic products.
Furthermore, the push for digitalization, innovation, and sustainability by the UAE will propel Islamic banking into new realms.
The Islamic world of finances expanded by 10.6% in 2024.
Moreover, the UAE contributed significantly to this expansion.
The country’s Islamic banking is famous for its resilience.
It also adapts to evolving market needs.
On its 50th anniversary of Islamic banking, the country marks milestones.
It continues to make new milestones in Islamic finance and banking worldwide.
The UAE Islamic banking is a model for others. It is a mix of tradition and innovation, yielding ethical, customer-focused solutions. UAE finance & banking, based on its strong roots and vision for the future, will continue as a necessary part of the country’s economic future.
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