Abu Dhabi - Mubasher: Eight Islamic banks have accounted for approximately 20% of total assets in the Emirati banking sector, which comprises 23% of total domestic credit as of the end of August, according to the UAE Central Bank.

"The growth of Islamic banking has been supported by robust growth of deposits that has hit 24% of total deposits by the end of August," said Mubarak Rashed Al Mansouri, the governor of the UAE Central Bank said at the opening of the International Financial Services Board Summit.

"The Central Bank, in turn, has extended its support to the sector by issuing Islamic Certificates of Deposits and availing the Collateralised Murabaha Facility, a marginal lending facility or discount window, to increase the capacity of Islamic banks to manage their liquidity in compliance with Islamic principles," Emirates News Agency (WAM) quoted the governor.

The credit of Islamic banks is mainly benefiting the private sector, particularly real estate activities, trade, financial activities and insurance, as well as small and medium enterprises, Al Mansouri added.

"The Islamic banking system is sound. The capital adequacy ratio hovers over 17%, and the Liquid Assets Ratio of 17% is well above the mandatory ratio of 10%. Therefore, Islamic banks constitute to some extent a pillar of financial stability in the UAE."

“We welcome and support the IMF and World Bank’s recent steps, specifically 'to collaborate, innovate, and develop the prospects of Islamic finance in a sound and sustainable way, by managing risks appropriately and ensuring financial stability,” the central bank governor noted.