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ADCB to Launch an Islamic Finance Company
/ 18 May 2009
ABU DHABI - Abu Dhabi Commercial Bank or ADCB, the third largest bank by assets, has incorporated an Islamic finance company, to offer a wide range of Shariah compliant products, a top official said.
The bank launched the Islamic Banking Department in September last year, as Islamic finance business is growing at a phenomenal pace. “Being a significant growth area, plans were afoot to further consolidate the Islamic banking business in 2009”, Mufaddal Khumri, Head of Islamic Banking Abu Dhabi Commercial Bank told Khaleej Times in an interview.
The Islamic Banking Department license received from the UAE Central Bank brought with it restrictions from offering the whole gamut of products and services that can be structured by use of multiple Islamic contracts. “This license allows us to offer products based on Murabaha and Ijarah financing and to accept deposits and open accounts,” Khumri said.
Abu Dhabi Commercial Islamic Finance or ADCIF has been incorporated as a private joint stock company with an initial capital of Dh200 million.
The founding shareholders to the new company are ADCB’s subsidiaries Abu Dhabi Commercial Bank or ADCB, Abu Dhabi Commercial Properties and Al Dhabi Brokerage.
“After having registered the company we are in the process of submitting documents to the UAE Central Bank for a license to begin the business,” he said.
ADCB Meethaq will be the flagship brand under which the bank will offer retail and corporate Shari’ah compliant financial solutions to individual and corporate customers through the Islamic Banking Department of ADCB and ADCIF.
The Islamic finance company will offer financing to individual customers, trade and business and conduct real estate transaction. On the deposit side it can accept deposits from corporate entities issue Sukuk and other forms of obtaining financing and manage investment portfolio and other investment schemes.
However, the company cannot accept retail deposits from individuals, and cannot provide financing to any single person or corporate in excess of seven percent of it’s paid up capital.
ADCB’s Islamic Banking Department and Islamic finance Company will complement each other and build congruence in functionality by fulfilling homogeneous product needs across customer segments. He said that the Islamic Banking Department offers deposits, transaction account services and selected financing products. “However, with ADCIF, we will be able to augment our product range via a multiplicity of Islamic contracts,” Khumari said.
On the launching new products, the head of Islamic Banking Department said that the Bank has recently rolled out the draw based Millionaire Destiny savings Account which entails consumers to save and at the same time make them eligible for a monthly and annual draw.
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