"At present we issue Certificates of Deposits (CDs) to suit the conventional banking, based on interest rate mechanism," said Saif Hadef Al Shamsi, Executive Director (Treasury), at the Central Bank of the UAE.
He was talking to reporters on the sidelines of a seminar on 'Venture capital and private equity: an overview with focus on regulation,' here yesterday.
Al Shamsi said the Islamic banks in the country could not invest in the CDs due to the element of interest. "That's why a demand for Shariah compliant CDs arises... Its a challenge for us," he added.
"We are in contact with Malaysian Central Bank, a pioneer in the field, as well as the Islamic Development Bank (IDB) to develop a new product to meet the market appetite," he said without giving details in this regard.
He said central bank is successfully running its CDs programme, starting in 1995, when total amount mopped up was Dh4-5 billion. The investment in CDs have now multiplied to Dh50 billion level, at the end of this quarter, up against Dh34 billion in December 2006.
Al Shamsi further said that rate of offer on CDs of various tenor are fixed on daily basis, making it lucrative for the banks. He said that 80 per cent of the CDs issued ranges from one week to one month tenor, while others have longer maturity period of up to 18-months.
"We encourage commercial banks to invest in CDs with one to three months tenors added.
In reply to a question, he said the central bank was 'not worried' about currency revaluation speculation, if there was any, since money was coming into the country. He said that Dh3.6775 exchange rate parity to a US dollar remains unchanged. Al Shamsi said that the Emirates Securities and Commodities Authority (ESCA) will govern the mutual funds, after an amendment being proposed to the company law.
Over 100 people in Lebanon have been reported killed during the hostilities started on October 7
An Emirati medical team is supervising the hospital, which has a capacity of more than 150 beds
He appeals for concrete political changes to prevent the planet's climate spinning dangerously out of control
Actions are necessary at all levels — government, private sector, as well as individual levels
The suspect first attacked a tourist couple with a knife and attacked two others with a hammer