February 23, 2026
Methodology About Newsletter
WE THE UAE 2031
The Vanderbilt Terminal for the UAE's National Transformation
INDEPENDENT GLOBAL INTELLIGENCE FOR THE UNITED ARAB EMIRATES
UAE GDP: AED 2.03T ▲ 5.7% | Non-Oil GDP Share: 84.3% ▼ -5.2pp | FDI Inflows: $45.6B ▲ 48.7% | GDP Growth: 4.0% ▲ -0.3pp vs 2023 | Inflation: 1.7% ▼ +0.0pp vs 2023 | Female Participation: 55.1% ▲ +0.6pp vs 2023 | Population: 11.0M ▲ 4.8% | Emiratisation Rate: 12.5% ▲ 2.1pp | Global Competitiveness: #7 ▲ 3 places | Clean Energy Capacity: 7.2 GW ▲ 18.4% | ADX Index: 9,842 ▲ 4.7% | DFM Index: 4,621 ▲ 6.2% | UAE GDP: AED 2.03T ▲ 5.7% | Non-Oil GDP Share: 84.3% ▼ -5.2pp | FDI Inflows: $45.6B ▲ 48.7% | GDP Growth: 4.0% ▲ -0.3pp vs 2023 | Inflation: 1.7% ▼ +0.0pp vs 2023 | Female Participation: 55.1% ▲ +0.6pp vs 2023 | Population: 11.0M ▲ 4.8% | Emiratisation Rate: 12.5% ▲ 2.1pp | Global Competitiveness: #7 ▲ 3 places | Clean Energy Capacity: 7.2 GW ▲ 18.4% | ADX Index: 9,842 ▲ 4.7% | DFM Index: 4,621 ▲ 6.2% |

Definition

Islamic banking is a financial system that operates in compliance with Sharia (Islamic law), which prohibits the charging or payment of interest (riba), excessive uncertainty (gharar), and investment in prohibited industries such as alcohol, gambling, and pork. Instead of interest-based lending, Islamic banks use profit-sharing arrangements, asset-backed financing, and leasing structures. Core instruments include murabaha (cost-plus financing), ijara (leasing), mudaraba (profit-sharing), and musharaka (joint venture partnerships).

UAE Context

The UAE is one of the world’s largest Islamic banking markets, with Sharia-compliant assets representing a significant share of the national banking sector. Dubai Islamic Bank, established in 1975, was one of the world’s first fully Islamic commercial banks. Today, major Islamic banks operating in the UAE include Abu Dhabi Islamic Bank, Emirates Islamic, and Sharjah Islamic Bank. The UAE Central Bank and the Higher Sharia Authority provide regulatory oversight ensuring compliance with Islamic principles. The UAE also hosts a thriving sukuk (Islamic bonds) market and Islamic insurance (takaful) sector, positioning itself as a global hub for Sharia-compliant finance.

Key Data

  • Market share: Islamic banking holds approximately 30 percent of UAE banking assets
  • First Islamic bank: Dubai Islamic Bank, established 1975
  • Regulatory body: UAE Central Bank with Higher Sharia Authority
  • Key institutions: Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates Islamic
  • Global position: Among the top three Islamic banking markets worldwide

Significance for Vision 2031

Islamic banking supports the UAE’s Vision 2031 by providing Sharia-compliant capital for economic development, attracting investment from Muslim-majority markets, and reinforcing the UAE’s position as a global Islamic finance hub. The integration of Islamic fintech, digital sukuk, and green Islamic finance instruments aligns the sector with innovation and sustainability objectives central to the national agenda.