The Emirates Banks Association has expressed its full support for the initiatives put forth by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) aimed at enhancing global transparency and credibility in Islamic finance and banking.
This support was articulated during a session that discussed the draft of the Sharia standard concerning specified asset leasing, organized by AAOIFI in Dubai and attended by leading figures in Islamic banking as well as accounting and auditing specialists from Islamic financial institutions.
AAOIFI is working towards developing the Sharia standard on specific asset leasing to create a clear and comprehensive framework for governing leasing contracts that deal with particular, tangible assets.
Jamal Saleh, the Director General of the Emirates Banks Association, highlighted during the session the growing significance of AAOIFI’s role in establishing rules, standards, and general principles for licensed financial activities that align with Islamic law, amidst the rapid evolution of Islamic banks and financial institutions.
The establishment of standardized guidelines is crucial for harmonizing practices and ensuring compliance in the banking operations of both individuals and financial institutions.
He added that the discussion concerning the draft Sharia standard on specified asset leasing represents another step in the ongoing constructive dialogue, aimed at enhancing purposeful conversations among specialists and sharing knowledge. This would provide a unified reference for drafting leasing contracts in accordance with Islamic law, thereby promoting operational safety and transparency in client dealings, which aligns with the initiatives of the Central Bank of the UAE to bolster governance, risk management, and innovation in Islamic financial institutions, as well as solidifying the UAE’s position as a global hub for Islamic finance and banking.
The event featured a welcoming address and an introduction to the draft Sharia standard regarding specified asset leasing, presented by Dr. Abdul Rahman Al-Saadi, the Secretary and Rapporteur of AAOIFI’s Sharia Board. Additionally, two sessions were organized to gather feedback from Islamic financial institutions on the draft, chaired by Sheikh Issam Mohammed Ishaq and Sheikh Dr. Aseid Al-Kilani, both members of AAOIFI’s Sharia Board. The relevance of this standard is underscored in transactions that include leasing vehicles, equipment, real estate, and infrastructure assets, which constitute a significant portion of Islamic financing.
The Emirates Banks Association has urged all member banks and financial institutions to thoroughly review the draft standard and contribute to its development, ensuring it serves as a comprehensive and precise framework for product design, contract formulation, and operational procedures related to specified asset leasing.