BUSINESS – Casting light on Dubai’s Islamic Finance Industry




CEO of Dubai’s Noor Bank, Hussein Al Qemzi talked to
The Middle East about Noor, the UAE’s Islamic finance industry
and the prospects for greater prosperity in the markets.

Slide1“There has always been an interest in this part of the world to foster and create Islamic friendly financial options for people of the area and the rest of the region,” Dubai-based Noor bank’s CEO Hussein Al Qemzi, explained to

“There has always been an interest in this part of the world to foster and create Islamic friendly financial options for people of the area and the rest of the region,” Dubai-based Noor bank’s CEO Hussein Al Qemzi, explained to The Middle East magazine. “Mid-1975 saw the establishment of the first Islamic bank here in Dubai and several have opened since . However, while part of the wider original government ‘vision’ to create an Islamic banking hub, Noor, established in 2008, is intended to be more progressive, more forward looking and able to connect and foster increased trade with Islamic nations and the rest of the world.” While Islamic banking is very much in the news at the present time, CEO Qemzi points out that its role within worldwide financial market remains small. “The UAE is one of the six leading countries at the forefront of Islamic banking and yet even within this country, it represents only around 20% of the financial sector. It is a fast growing sector but not the dominant one.” While European and other international banks have introduced a lot of Islamic platforms and products onto the market to serve the Middle East region, there is still work to be done. “ Many good, major new products have come to the Islamic market through European and western initiatives, some of which could be said to have contributed to dramatically changing the landscape of the Islamic banking structure,” said Qemzi. One of these was the popularising of sukuk. Before this time the global powers had looked upon Islamic banking as a niche market but sukuk opened the door for more cooperation between the two sectors and presented more opportunities to create applications, which have since helped change and develop the scope of the industry. “ Western initiatives There are many examples of Islamic banks that have established themselves on the High Streets of cities in Europe but to do so is not an ambition for Noor, Qemzi confirmed. “ It would be difficult for us to establish ourselves as a high street bank in a European city. I can be very competitive in my own market but in Europe they have their own specific needs. European Islamic banks have the best experience of their own regional mortgage requirements, for example, and clients are likely to be more at ease with a bank that fully understands and can satisfy those specific needs, providing ‘home grown’ solutions. “The other thinking is that within Europe, Islamic banks are aiming to provide banking products for a specific community, that is the Muslim community. Here in Dubai, I don’t have to think that way because here, we are able to provide banking products that include everyone. Not because all my clients are Muslims but because we are a local bank serving the needs of a local market.” However, the CEO of Noor, does not believe that matters of personal finance, whether taking the form of a mortgage or car finance, should only be determined by faith. “In the UAE,” as he points out “there are eight Islamic banks competing with a total of around 50 banks in total, all of them offering similar products. It is a matter of personal choice. “We follow a policy where we are forward looking and tolerant, open to all, Muslim and non-Muslim alike. However, the way we conduct business is 100% Islamic. It is not a separate window for us, not simply one more product we offer.” While the concept of Islamic banking may appear to offer its customers a narrower range of financing options than more conventional banking methods, Qemzi insists that this is a matter open to interpretation.

The CEO of Dubai-based Noor bank, Hussein Al Qemzi, believes strong bi-lateral trade links can foster both peace and prosperity

“ I would say that as Muslims in Dubai we look at the world somewhat differently to most of the Muslim communities in Europe. In Europe Muslim communities are closed, separate from the mainstream. Here we do not consider our community to be in any way closed. On the contrary, we think of it as being a conduit to the rest of world. Many years ago we were deeply immersed in trade, running caravans between this region and India, China, and elsewhere. The silk road, the spice route, our extensive trade with Italy and other parts of Europe, is well documented. “Of course, I would like to see our faith becoming open and I would like to see a better model of Islam emerge from the current despair the Islamic world finds itself emerged in. Islam has for centuries preached acceptance of other faiths, which is why it has spread from community to community. What we sometimes see today, shall we call it ‘the less acceptable face of Islam’, is not taken from the teachings of the Koran. These expressions of violence and hate, I believe, come as a result of lives lived in poverty and despair. Islam should be working to elevate these levels of desperation, to encourage more in the way of bilateral trade and business with other parts of the world so people can see the benefits of trade and operating a successful business. “One cannot trade in an atmosphere of war, it requires peace to build a business. Also, by trading with other people you learn about their strengths and weaknesses first hand, which helps develop an atmosphere of tolerance.” CEO Qemzi is a staunch believer in the old maxim of teaching a man to fish, rather than providing him with a single meal. “You can give people aid from now to eternity but not really help them in any effective way,” Qezmi observes. “They take aid, they eat it but in the end they go back to the same thing. What they desperately need is help to get out of their situation; help in the form of creating a workable and effective infrastructure, not just a bricks and mortar infrastructure but one based on providing a society with laws, justice and transparency – these are the foundations on which the poor start to build a successful life, which is why we try to encourage direct trade with such nations. “In 1974 the then Islamic Conference Organisation (now known as the Organisation of Islamic Development) addressed this point. They realised one of the major reasons for poverty in Islamic nations was the absence of finance. At the time, there were many misconceptions; some people even thought that Islamic teaching declared it was forbidden to deal with banks. The Organisation of Islamic Development worked on establishing a model that is consistent and compatible with Islamic teaching. It was controversial in the 1970s but over the years we have seen growth and evolution, by questioning what is acceptable and what is not. “We seek – at all times – to be ethical. For example, we don’t fund armaments, casinos or anything that encourages gambolling, projects that harm the environment, rely on the labour of young children or exploit the poorest members of society. However, this is not only common to the Islamic banking industry. In the western world many people are also seeking to make ethical investments. I see a lot of non-Islamic initiatives that testify to this.” On whether or not Islamic banking has reached a new era of expansionism, Qemzi is cautious. Progress is being made all the time but there is still work to be done, he insists. “To achieve its full potential Islamic finance needs greater clarity, a better-defined code of ethics, structure and transparency. It is by blending the best of both worlds that the greater good will is served.”

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