UAE Banking Sector Charts Course for Islamic Finance Growth Through Strategic Implementation Framework
Al Masraf and the UAE Banks Federation have identified key priorities to translate legislative frameworks into practical initiatives supporting the nation's ambitious Islamic Finance and Halal Industry Strategy 2025-2031.
The inaugural conference on “The Role of Financial Institutions in Implementing the UAE Islamic Finance and Halal Industry Strategy 2025 – 2031” concluded recently at Grand Hyatt Dubai, bringing together prominent Shari’ah scholars, regulatory authorities and senior executives from Islamic financial institutions to advance implementation of the strategy.
Convened under the theme “From Legislation to Growth and Innovation,” the gathering emphasised the critical transition from establishing legislative frameworks to developing concrete financial products and services that support the halal economy and strengthen the integration between Islamic finance and related industries.
Dr. Omar Alderei, Chairman of the General Authority of Islamic Affairs, Endowments and Zakat, opened the proceedings, whilst Abdulla Ahmed Al Saleh, Undersecretary at the Ministry of Economy and Tourism, and Mohamed Omran Al Shamsi, Deputy Chairman of the UAE Banks Federation, participated in the discussions.
The conference focused on translating strategic frameworks into practical mechanisms across six key domains: financing, investment, sukuk, technology, governance and cash waqf. Participants explored how legislative and regulatory infrastructure can more effectively support product development and innovation within the real economy.
Current performance demonstrates the sector’s momentum. Islamic banking assets in the United Arab Emirates reached AED 1.4 trillion in June 2026, with 43 licensed Islamic financial institutions operating domestically. The strategy targets AED 2.56 trillion in local Islamic finance assets by 2031, whilst the nation ranked third globally in the 2025 Islamic Finance Development Indicator.
Discussions revealed the substantial potential of cash waqf as a development area within the Islamic finance ecosystem. Participants emphasised the importance of establishing clear institutional frameworks governing investment, disclosure and impact measurement, coupled with enhanced collaboration among financial institutions, government entities, businesses and family offices.
Governance, Shari’ah supervision and risk management emerged as essential pillars for sustaining confidence and growth. The conference addressed emerging challenges arising from digital transformation, including artificial intelligence, digital assets and cybersecurity concerns, whilst highlighting the necessity for balanced approaches to innovation that maintain Shari’ah and regulatory compliance.
Global Islamic finance assets reached approximately USD 6.5 trillion in 2025, compared with USD 2.5 trillion in 2018, with projections suggesting growth to approximately USD 10.5 trillion by 2030. The UAE’s Islamic finance assets more than doubled over this period, expanding from around USD 251 billion in 2018 to approximately USD 532 billion in 2025.
Notably, Environmental, Social and Governance sukuk demonstrated exceptional growth in the Emirates, rising from approximately USD 1.8 billion in 2020 to USD 18 billion in 2025. The nation accounted for approximately 24.6 per cent of the global ESG sukuk market, with an ESG disclosure index of 83 per cent compared with a global average of 63 per cent.
Conference outcomes and recommendations prioritised strengthening coordination between regulatory authorities and financial institutions; expanding financing support for priority sectors and small and medium enterprises; further developing the sukuk market; accelerating innovation through digital platforms; and consolidating the nation’s position as a global hub for Islamic finance through scaled solutions.
Source: WAM News Agency