Islamic banking assets reach Dh1.4 trillion by June.
Dubai: The UAE is targeting Dh2.56 trillion in domestic Islamic finance assets by 2031 under a national strategy aimed at strengthening legal and Shari’ah certainty while enhancing customer protection.
Islamic bank assets in the UAE reached Dh1.4 trillion as of June 2026, with 43 Islamic financial institutions currently licensed in the country. The UAE ranked third globally in the 2025 Islamic Finance Development Indicator.
The targets are part of the UAE Islamic Finance and Halal Industry Strategy 2025-2031, approved by the Cabinet in May 2025. The Central Bank of the UAE is working with federal and local authorities to further integrate Islamic finance and the halal industry into the country’s wider economic agenda.
Clearer rules for customers and banks
A key focus of the strategy is to establish a clearer legal and Shari’ah framework for Islamic finance transactions, providing greater certainty for both financial institutions and customers.
The Commercial Transactions Law, Federal Decree by Law No. 50 of 2022, contains a dedicated chapter covering Islamic finance contracts and financing arrangements. It also ties relevant provisions to Shari’ah standards issued by the Higher Shari’ah Authority, establishing a framework for interpreting the rules and resolving disputes.
The Central Bank is authorised to issue regulations with the approval of the Higher Shari’ah Authority.
The framework aims to clarify the rights and obligations of customers and financial institutions, promote consistency in Shari’ah interpretations and reduce legal and Shari’ah-related disputes involving Islamic finance transactions.
Registration fees and costs addressed
The Central Bank Law, Federal Decree-Law No. 6 of 2025, sets out rules governing the activities of Islamic financial institutions, including their supervisory and Shari’ah governance frameworks.
Under the framework, Islamic financial institutions are permitted to conduct transactions involving real estate and goods when necessary to structure Shari’ah-compliant financing. It also exempts Islamic finance transactions from registration requirements and related fees or costs.
Protecting customers is among the framework’s key objectives, alongside strengthening confidence in Islamic finance services and creating a regulatory environment that encourages innovation.
More than 280 standards and resolutions
Established at the Central Bank in 2018, the Higher Shari’ah Authority works to promote consistent Shari’ah practices across Islamic financial institutions.
More than 280 standards and resolutions have been issued to govern Islamic financial transactions and promote greater consistency in Shari’ah interpretations, alongside more than nine Shari’ah governance standards.
The framework also includes prudential standards covering financial integrity, risk management and the stability of Islamic financial institutions.
Sukuk, Islamic funds and halal industries
The wider strategy goes beyond banking, with plans to expand the UAE’s ecosystem for sukuk, Islamic money markets and Islamic funds while supporting the growth of larger and more competitive Islamic financial institutions.
It also aims to strengthen links between Islamic finance and the halal economy by increasing local production of high-value halal products, developing a halal traceability system to support re-exports, and providing greater support for SMEs and technology startups in the sector.
Other sectors identified for development include halal tourism, modest fashion, Islamic-themed media and the broader use of waqf mechanisms to support philanthropic activities.
