TUESDAY, OCTOBER 28, 2014 KHALEEJ TIMES [1053535] making inroads into the mainstream give us a perspective of islamic banking in the Uae, and also tell us about its contribution to the nom- inal gdP of the Uae? The UAE has been a pioneer within the Islamic banking industry. Ever since the establishment of Dubai Islamic Bank (DIB) in the 1970s, the industry has constantly grown over the past few decades. To date, it is estimated that Islamic banking in the UAE constitutes around 18 per cent of the total banking asset of Dh2 trillion as of 2013. The competitive landscape is heating up with several Islamic banks of- fering a diverse range of Shariah- compliant products and services across various sectors ranging from retail to wholesale to specialised products such as Takaful. In 2013, the UAE’s nominal GDP estimated at $400 billion was up by 5 per cent from the previous year. Islamic finance has been a strong contributor to the overall economic growth. For instance in 2013 a number of landmark capi- tal market transactions were initi- ated where Islamic finance was in- volved: the Emirates Airlines $1 billion sukuk and the Dubai $750 million sovereign sukuk, both is- sues being extremely successful. On the consumer side, the UAE- based Islamic banks continue to penetrate the market through in- novative Shariah-compliant prod- ucts across a broad spectrum of retail services. Moving forward with the govern- ment’s initiative to establish Dubai as a Capital of the Global Islamic Economy, Islamic finance and DIB are set to expand further, boosted by the anticipated growth in the overall UAE economy. What measures have you taken as a bank to broaden the appeal of islamic banking among the large expatriate population? Dubai Islamic Bank caters to all customer segments and does not focus on a niche segment. During the last few years, we initiated spe- cific programmes and projects with a clear target to plug all product and service gaps that existed with- in DIB in order to have a more comprehensive and fulfilling offer- ing for all our customers. This strategy has worked exceedingly well as DIB has so far been the top- performing bank in 2014 beating market expectations by a wide margin. With ample liquidity and strong capitalisation, we are ready to further strengthen and entrench our position in the banking sector in the UAE. We want to make bank- ing a simple exercise for all. kindly enlist some of the popular products in this space. As one of the largest and well-en- trenched consumer franchises in the UAE, we are cognisant of the needs of the expatriate population and over the years have invested heavily in developing products and offerings built around their require- ments. For example, a few years ago, we were primarily focused on providing home finance to UAE na- tionals only, but now, particularly after the acquisition and integra- tion of Tamweel, we have en- hanced our offering for expats, and have become the largest mortgage provider in this segment. Home remittances are always a key con- cern for many expatriates and knowing this we have tied up with Western Union. It allows expatri- ates with accounts in DIB to remit funds to identified beneficiaries in their home countries through a wide variety of channels including online banking. Another product widely used in the UAE is Remit-to-ATM, a prod- uct that we pioneered. It allows ac- count holders to provide instant cash to anyone in UAE via DIB ATM, irrespective of whether the recipient is a customer or not. Many of our expat salaried custom- ers now have the convenience of getting additional cash through the Salary-in-Advance product, which provides instant credit to their ac- counts. Furthermore, the Business Online platform provides our SME Serving the UAE for almost four decades, Dubai Islamic Bank has pioneered a number of products and services that suits the banking and financial needs of its clients. The bank has constantly improvised its offerings, and reached out to a wide population. In an exclusive chat with Khaleej Times, Dr Adnan Chilwan, CEO, Dubai Islamic Bank, talks about the Islamic banking and finance industry, the importance of the World Islamic Economic Forum in Dubai and much more. Excerpts: Dr Adnan Chilwan, CEO, Dubai Islamic Bank T he 10 th World Islamic Eco- nomic Forum (WIEF), which is being held under the patronage of His High- ness Shaikh Mohammed bin Rashid Al Maktoum, Vice-Presi- dent and Prime Minister of the UAE and Ruler of Dubai, will be attended by more than 2,000 par- ticipants from over 100 countries. The three-day event will run until October 30. “We are happy to welcome all the WIEF delegates to Dubai. The wide international representation, especially the presence of so many heads of government, economic experts and stakeholders, will make the 10 th WIEF a definitive platform of innovative partner- ships. Over the next few days, we look forward to a period of highly creative engagement on the Islam- ic economy that will benefit the delegates as well as the countries they represent, and enhance the position of Dubai as an Islamic economy hub,” said Abdulrahman Saif Al Ghurair, Chairman of Dubai Chamber of Commerce and In- dustry (DCCI) and Board Member of the Dubai Islamic Economy De- velopment Centre. Musa bin Hitam, Chairman of WIEF Foundation, said: “Dubai complements the forum very well with its massive pool of business community, world-class infra- structure, and its strategic location connecting the east and the west. The 10 th edition in Dubai has gath- ered nine heads of state, 12 minis- ters, four Central Bank governors, 181 role-players, and about 2,000 delegates from more than 100 countries. We definitely look for- ward to a successful forum.” Bearing the theme, ‘Innovative Partnerships for Economic Growth’, it serves to promote more cross-border and cross-industry collaborations through a series of thought-provoking discussions and robust networking sessions. GLOBAL CAPITAL OF ISLAMIC ECONOMY Several heads of government and delegates from over 100 countries will attend the 10 th WIEF in Dubai Abdulrahman Saif Al Ghurair,Chairman, DCCI Musa bin Hitam, Chairman, WIEF segment with over 90 services re- lated to banking and e-government including settlements with DeG (Dubai Smart Government), DED (Department of Economic Devel- opment), and Dubai Trade though direct connectivity with these key entities. Our foreign exchange cash service at Dubai International Air- port is another step in our focused strategy of expanding touch points in the expat-populated areas. the islamic development Bank (idB) recently listed $1-billion su- kuk in dubai nasdaq. What is the significance of this event? This is another clear testament to Dubai’s unique positioning as be- ing the critical pillar of the global Islamic economy. The infrastruc- ture supporting the initiative of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-Presi- dent and Prime Minister of the UAE and Ruler of Dubai, is in place and institutions like IDB are now recognising the same. Simultane- ously, such events will trigger stronger ties with IDB’s member states and further strengthen trade and related activities between them and the UAE. since the financial crisis of 2008, globally people are looking at is- lamic banking and finance as the rightful alternatives. What are your views on this? Right at the onset, I want to clarify that Islamic banking caters to all segments of banking and finance and not just to the niche Muslim population, which is sometimes the perception among developed countries. At DIB, we offer com- prehensive banking services across all customer segments and indus- try sectors of the economy. Islamic banking and finance does not allow for speculation in any way and hence structures that are essen- tially dependent on uncertain out- comes are eliminated from our of- ferings to our customers. Similarly, as a general thumb rule, the pur- pose or asset being financed is identified upfront and hence, there is a greater understanding of where the money is going and what it is used for. These factors stood out during the last few years as Islamic institutions generally remained more resilient compared to its con- ventional peers. That said, the basic rules of good governance and quality risk man- agement remain just as important for Islamic as for conventional in- stitutions. Quality disciplines such as these, combined with focused innovation and optimum use of technology are key to driving the Islamic banking industry forward. External stakeholders including evolution in legislations and laws is another major factor which Islamic banks have to drive in order to fur- ther entrench this already fast growing industry in the global fi- nancial landscape. identify constraints or challenges faced by the industry in the Uae? I feel that purely from a banking and finance perspective, the chal- lenges that Islamic banks face are very similar to those faced by con- ventional counterparts. These re- late generally to market move- ments and changes in global benchmarks and indices, competi- tion, and general economic condi- tions among others. However, as a relatively nascent industry, Islamic banking still has room to grow in order to gain some of the econo- mies of scale that conventional players enjoy. That said, over the last decade or so, the sector has grown at nearly twice the rate of the conventional one and is set to become a far more significant force. Innovation has also been a major challenge, particularly with certain products that have key reli- ance on interest-based lending. We, at DIB, have made huge in- roads in terms of working with Shariah scholars to develop high quality, competitive and easy to use products to our growing clien- tele, thereby plugging any signifi- cant gaps in our product suite across consumer and wholesale. However, there are still areas par- ticularly around liquidity manage- ment and trade that Islamic insti- tutions need to focus on to take advantage of this ever-growing op- portunity in global trade and work- ing capital financing. Lastly, regu- lators in the UAE have been extremely helpful in establishing Islamic liquidity management op- tions for institutions like us. But again, DIB and many other players require many more products to manage excess liquidity and, though Islamic CDs with Central Bank and the Sukuk investments are strong options, more products are required for both short-term and long-term liquidity manage- ment. Finally, legislations and laws need to be enhanced to accommo- date the activities of Islamic fi- nance as more and more institu- tions, governments, corporates and individuals are leaning to- wards this fast growing form of banking and finance. What is your take on the World is- lamic economic Forum in dubai? We are looking for a sustainable strong growth journey for DIB for the benefit of our customers as well as shareholders. Simultane- ously, we want to promote and el- evate Dubai’s ambitions in becom- ing the capital of the global Islamic economy. At the same time, as the first Islamic Bank in the world and a global leader in Islamic banking and finance, we are committed to strengthening the overall industry and economy through proactive dialogues with the regulators, in- stitutions, academia as well as the broader social society. Final word We believe that, in this overcrowd- ed space, we need to make the business of banking simple for our customers. We believe that since we compete in the banking sector, the greatest differentiator will be the quality of service and how easy the customers’ overall interaction is with our bank. Thus, in line with the Shaikh Mohammed’s initiative of establishing Dubai as a “Smart City”, we have already moved for- ward with positioning DIB as the “Smart Bank” for all our custom- ers, a concept which will be rolled out to all our touch points by the end of October this year. The aim is simple: To make banking experi- ence with DIB enjoyable; so less time, no paper, and incredibly faster turnarounds. “Smart Bank” is the new and renewed service commitment that we extend to our customers and is sure to transform the service industry across, not just the financial sector, but the entire market in the UAE. KHALEEJ TIMES | ADVERTISING SUPPLEMENT