Thirty years ago, Dubai Islamic Bank ('DIB') created history by becoming the world's first Islamic Bank.

Today, Islamic banking has become one of the fastest growing economic sectors with over 300 financial institutions, with assets estimated at over US $300 billion providing Islamic financial services. Despite huge growth in the sector DIB continues to be the industry pioneer and undisputed market leader to date. Since its inception, DIB has evolved from a retail bank to a fully fledged bank catering to almost all the requirements of its customers in providing Sharia-compliant solutions to major local and international companies. It has constantly upgraded its services to private individuals, who remain a highly valuable element of DIB's customer base. By combining the best traditional Islamic values with high-standard technology and innovation, DIB is committed to not only fully comply with the principles of Sharia in all its financial dealings but to also facilitate its customers who venture into the world of Islamic banking in such a befitting way that they would feel reaping the best rewards of both the worlds. For its outstanding performance and contribution to Islamic financing, DIB received the Best Islamic Bank in the Middle East Award (2006) by both Euromoney's Islamic Finance Weekly and Gulf Wealth Forum. DIB has also been awarded the Bank of the year (UAE) at the 2006 Banker Awards. DIB has not only been at the forefront of innovation but has excelled every step of he way. With the launch of Al Islami Internet Banking, DIB has re-affirmed its commitment to promote and develop Islamic banking in line with the requirements of the modern age. For these efforts, DIB received the Golden Trophy at the UAE Web Awards in 2006. DIB is also the first to offer a mobile SMS messaging service in both Arabic and English. Moreover, DIB became the first bank in the Middle East to introduce Internet Protocol (IP) for its Visa card operations. With path-breaking vision and bold strategies, DIB aims to enhance its status as a world leader committed to the goal of providing "World Class Banking." a)Sukuk Powerhouse of the World Sukuk is a hallmark of DIBs product innovation capabilities. The development of Sukuk (Islamic bonds) has earned DIB several awards including Banker Middle East Industry Award for Best Bank and Best Product Innovation (2006). DIB is honoured to have successfully led to manage the world's first airline Sukuk for the Emirates Group. This seven year Sukuk Al Mushtaraka valued at US $550 managed to attract investors participation from Europe and the Far East. Based on its outstanding performance DIB has been awarded the largest Sukuk issue in the history of Islamic Banking world over for general funding and expansion needs of Dubai and Jebel Ali Ports. The US $2.8 billion issue is being lead-managed by DIB and is part of a large financing package being arranged at a time when the ports' operator is bidding to become one of the world's largest. The 2-year bullet tenor Sukuk is also the first convertible Sukuk ever to be issued. This deal earned DIB the Governor's Award for Most Innovative Product (Sukuk) at the Kuala Lumpur Islamic Finance Forum 2006. The Sukuk was also dubbed the Middle East Debt Capital Markets' Deal of the Year by Euromoney International Financial Review. DIB has also co-managed Pakistan's first Sovereign Islamic Sukuk issue. This US $600 million received a tremendous response from the investors and consolidated the status of DIB as an Islamic Sukuk powerhouse. Dr Ashfaque Hasan Khan, Economic Advisor to the Ministry of Finance in Pakistan, has particularly acknowledged the bank's participation and significant contribution to the success of the transaction. The credit rating assigned to DIB by Standard and Poor's is 'A' long-term and 'A1' short-term for the year 2006. The DIB has also been assigned an A1/Prime 1 ranking by Moody's. The DIB aims to maintain the same high standards set for product development in the coming years. b)Ensuring Sharia Compliance To adhere to traditional Islamic values and ethics, the DIB relies on the expertise of scholars of high repute with extensive experience in law, economics and banking systems.

The members of DIB's Fatwa & Sharia Supervision Board specialize in law and finance as prescribed by Islamic code. The Board is appointed by the DIB's General Assembly and ranks above the Board of Directors. The DIB's board supervises the development and creation of innovative Sharia-compliant investment and financing products and services to ensure that all the transactions are free from riba (interest) and all other Sharia repugnancies. Thorough professionalism and a stringent compliance to rules have made DIB the pioneering organization to practice Islamic finance in its true letter and spirit. DIB also contributes to Islamic Banking and Finance seminars, conferences, exhibitions, workshops and studies such as those on Islamic Retail Banking to disseminate information and educate the masses on Islamic banking. c)More Than a Bank DIB takes pride in its efforts to expand the scope of Islamic funding by focusing on financing capital intensive sectors such as power, airlines, transportation, telecommunication, and real estate through common Ijara (leasing) facilities at both the local and regional levels. DIB has been financing landmark properties across the UAE such as the Jumeirah Beach Residence and the Dubai International Airport. Deyaar, a 100% subsidiary and real estate arm of DIB, is the largest and most successful real estate company headquartered in Dubai. Deyaar acquires, develops, rents and manages real estate throughout the GCC. Working with both large and small investors, Deyaar takes pride in building homes and not houses. Tamweel, another flagship subsidiary of DIB, is the leading home finance service provider in the UAE. It is the only UAE based company offering Islamic home financing. The company has financed property worth over Dirham 7 billion and was recently converted to a Public Joint Stock Company with overwhelming demand subscriptions exceeding the required amount by 485 times.

http://www.dibpak.com/AboutUs.aspx?tab=6 http://www.dib.ae/en/privatebanking.htm

Bringing Islamic Banking to India M D Nalapat There are more Muslims in India than there are in Pakistan, which is why it is surprising that successive governments have so far done nothing to bring Islamic banking into India. The consequence of such neglect is that millions of observant Muslims are forced to park their savings in dubious entities, because they have been deprived of financial institutions in India that are Sharia-compliant and avoid the payment of interest, because of its ban in the Quran (3:130).

Indeed, the Quran sets forth some very healthy financial principles,such as the avoiding of the giving of finance to unsavoury businesses (5:2), and the showing of compassion to the financially disadvantaged (2;280). As has been pointed out by several scholars,the prohibition of interest is not unique to Islam, but is also found in Judaism and Christianity ( Psalms 15:5, Nehemiah 5:7). However, throughout the world, the giving and taking of interest has become widespread Financial experts estimate that more than $50 billion of funds from the Gulf can flow to India, should Islamic banking institutions be set up in the country. This will generate 2.7 million

jobs in the country,both directly and indirectly. At present, almost all the surplus cash of the Gulf countries is parked in London (which, ironically, is the worlds top Islamic Banking centre), New York, Zurich and Frankfurt. Naturally, the financial instititions headquartered in these locations would not like to see India emerge as a competitor in the parking of funds from the Gulf.

They are aware of the strong historical and civilisational ties between India and the Arab world, and are nervous that this may result in funds moving away from them. Indeed, many Arabs are justifiably upset that they have suffered a collective loss of $1.3 trillion because of the numerous malpractices of financial institutions in the US and the EU, and would prefer to place their money in India. However, thus far, because of the immense influence that financial entities in the US and the EU have over the Reserve Bank of India and the Ministry of Finance, thus far, the policy changes needed to attract such funds have not come about So pervasive is the influence of US and EU funds over Indias financial policymakers that the Reserve Bank of India significantly slowed down economic expansion in India during 2007-2008 by raising interest rates to levels not seen in more than a decade.

Although the RBI justified this as an anti-inflation measure,they themselves know that such painful steps have no impact on price rise,caused as this is by speculation and by policies that favour the middleman over the producer and the consumer. All that the policy of high interest rates has done was to make several segments in Indian industry less competitive than they were when interest rates were low. The policies followed by the monetary authorities in India have forced several corporates to borrow money from London and other centres in the developed world,at a profit for these centres of 3%.

Small wonder that there is so much pressure on India to prevent the authorities from taking steps that could attract funds from the Gulf. Had the authorities in India encouraged their domestic companies the way policymakers in the US and the EU unfailingly do, India would not have been in todays situation,when even tiny Taiwan exports double the volume India does Recently, the government of Kerala, a state that has ties with the Gulf that go back for 1600 years, sought to set up an Islamic Banking division in one of their financial institutions. However, a politician having close links with a section of the Hindu religious leadership has got the Kerala High Court to stay the operationalisation of this move. Indias courts are famously liberal when it comes to granting stays,with some even lasting for decades. In countries such as the US or the UK, stays are granted only after the court is convinced that there exists a strong prima facie case in favour of the individual making the request. In the case of India, stays by a court are granted far more liberally. The Kerala High Court order means that the attempt by the states Communist rulers to set up an Islamic banking system in a state where 20% of the population are Muslims may be indefinitely delayed. Bankers in Europe and in the US can rest easy, knowing that it may be a long time before the estimated $1.16 trillion dollars parked in so-called Islamic Banking institutions in these locations faces competition from India

Although it is true that several policymakers allow themselves to be unduly infuenced by interested parties operating overseas, the fact remains that overall, Indias policymakers are a patriotic group. Indeed, with all

their faults, Indias administrators have done a commendable job in ensuring a modicum of stability in the face of frequent political upheavals.

Hence, this columnist is optimistic that it will not be long before India copies the Malaysian model, and brings Islamic banking into the country. Closer economic interaction between India and the Gulf is in the interests of both sides. The GCC countries and India are complementary in their skills and congruent in their interests. The setting up of Islamic banking divisions within the existing banking network in India would ensure a substantial flow of investible funds into the country.

Of course, none of this money would get diverted to industries such as gambling and alchohol, that are barred in Islam. A beginning has been made by the Jamaat-i-Islami Hind,which has set up a committee on Islamic banking under a noted scholar, Mr Abdur Raqeeb. Some influential policymakers within the Congress Party are also active in seeking to overcome the block to Islamic banking that has been artificially created by international interests keen to ensure that India does not take money away from them India is a secular country, and therefore Islamic banking needs to be seen not as a Muslim issue, but as one that involves the welfare of each citizen,whether Muslim, Christian, Hindu, Jain, Sikh or Buddhist.

After all, the huge volume of remittances from Indians working in the Gulf benefits the entire country and not simply those belonging to a particular religion.

Islamic banking therefore needs to be viewed less as a religious right than as a secular advantage. Allowing Indias observant Muslims to gain access to domestic funds that are Sharia-compliant would ensure that they avoid getting duped by unregulated and often dubious entities that seek to profit from their faith. The Islamic world is Indias natural partner, and one way of strengthening such linkages would be through the introduction of Islamic banking in India Indeed, it can be argued that the healthy financial principles mentioned in the Quran were the earliest enunciation of the mutual fund concept. Unless mutual gain comes from mutual effort, and unless moral principles are given primacy in decision-making, the world will witness further man-made catastrophes such as the 2008 financial crash.

This was caused entirely by the greed of some 380 individuals, who were the prime movers in the relentless speculation that artificially drove up the prices of commodities such as food grains, copper, steel and oil. Sadly, apart from a handful,not one of the 380 have suffered any legal consequence of their devastating economic attack on humanity.

Indeed,the Obama administration seems as deferential to them as was George W Bush. Small wonder that speculation in commodities is once again rearing its poisonous head, making the price of oil and other essentials rise despite the weakened state of the international economy. Judging by the way in which Barack Obama, Gordon Brown, Angela Merkel and others are obedient to their whims, it looks as though those guilty of causing the distress of hundreds of millions in their insatiable greed for money will once again plunge the world into chaos, and soon.

In such a context, the need to create financial systems grounded on moral values becomes clear. Should Islamic banking entities finally get sanctioned in India, and should they function in the way that is intended, then not only Muslims but Hindus and others will start putting their savings in them. As the sages say, we need to look for good everywhere, so as to reach it everywhere.

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