Emirates Islamic launches four year Wakala Investment option

Offers 2.57% expected profit rate on investment amounts ranging from AED 100,000 to AED 5 million Profits to be paid to customers on an annual basis.

Emirates Islamic launches four year Wakala Investment option

Emirates Islamic launches four year Wakala Investment option

Dubai, November 23, 2013: Emirates Islamic , one of the leading Islamic financial institutions in the UAE, announced the launch of a four year Wakala investment option for customers, with an expected profit rate of 2.57 per cent per annum.

Available on investment amounts ranging from AED100,000 to AED 5 million, Emirates Islamic ‘s latest product closely follows the launch of the 3-year special Ramadan Wakala, that was introduced earlier this year. The four year Wakala investment option differs from conventional Wakala investments, with the profits being paid out on an annual basis to customers.

According to Sharia, a Wakala is a contract between the customer and the bank, where the bank as the Agent has the responsibility to perform a certain task (such as invest in Sharia-compliant goods and/ or financial assets) on behalf of the customer usually for payment of a fee or a commission.

“As a responsible bank focused on community-related initiatives, Emirates Islamic is encouraging its customers to take advantage of such products and develop a culture of saving,” said Faisal Aqil, Deputy CEO – Consumer Wealth Management, Emirates Islamic . “To this end, we are launching a variety of Sharia-compliant savings products, which we are confident will inspire greater saving trends among customers.”

While the amount invested will be for a period of four years, the profits will be paid annually to the customers.

About Emirates Islamic :

Established in 2004, as Emirates Islamic Bank , Emirates Islamic opened its doors with the clear goal of offering discerning customers Islamic finance solutions. Combining the best in Shari’a compliant services with the strongest levels of customer care and efficiency, the bank has established itself as a major player in the highly competitive financial services sector in the UAE. Offering products and services developed in line with the highest ethical standards, Emirates Islamic gives customers the transparency they seek in a strong, honest financial partner.

Emirates Islamic offers a comprehensive range of products and services across the Personal, Business and Corporate banking spectrum. Its network has expanded to reach over 50 branches and more than 100 ATMs across the UAE. In the fast growing area of online and mobile banking, the bank has the reputation as an innovator, and was the first Islamic bank to launch a mobile banking app and the first bank in the Middle East to launch an App on the new Windows 8 mobile platform.

Emirates Islamic has received numerous accolades, both regionally and in the international arena, including recognition for “Best Islamic Bank, UAE” by two extremely prestigious publications, World Finance and CFI. In 2013, the bank was recognised as a “Superbrand 2013,” and as the “Best Corporate Bank” in the UAE in 2013. In addition, it has also been recognised by Sheikh Mohamed Bin Rashid Business Award and Ethos Award for Best Islamic Bank for Customer Service in the UAE. These awards are recognition of the high levels of customer satisfaction as well as an acknowledgement of the bank’s strong record of performance, growth and market leading banking practices.

For further information please visit www.emiratesislamic.ae

For further information, please contact:
Amina Al Zarooni
Media Relations Manager, Emirates Islamic
Tel: 971 4 4397430; Mob: 971 56 6405080
Email: [email protected]

Sudha Chandran | Hiba Moussa
ASDA’A Burson-Marsteller, Dubai, UAE
Tel: 971-4-4507600, Fax: 971-4-4358040
Email: [email protected] | [email protected]

© Press Release 2013.


How Islamic banks fund projects

ISLAMIC finance uses both debt and equity to fund transactions.

Some experts see equity financing as being closer to the shariah’s original aim of promoting equality in sharing risks and rewards, but others say debt instruments play a similarly important role.

The global financial crisis has prompted debate about the use of excessive debt and speculation to fuel growth.

It has also renewed calls for Islamic finance to use more equity- based structures such as musharaka and mudaraba to reduce its reliance on debt funding.


A partnership where profits are shared as per an agreed ratio, whereas the losses are shared in proportion to the capital/investment of each partner.

All partners to a business undertaking contribute funds and have the right, but not the obligation, to exercise executive powers in that project, which is similar to a conventional partnership structure and the holding of voting stock in a limited company.

It is often used in investment projects, letters of credit and the purchase of real estate.


A limited partnership where thebank appoints the obligor as its limited partner to invest money in specific or general activities.

The losses are borne solely by the bank in the absence of fraud or negligence by the obligor, but profits are shared in an agreed ratio.

Customers can use mudaraba financing for overdraft requirements, short-term financing and bridge or project financing needs.


An investment agency where the bank appoints the obligor as its investment agent to invest the finance money in specific or general activities.

Any losses are borne solely by the bank in the absence of fraud or negligence by the obligor and the rates of return are variable.


The bank acquires assets from a vendor at cost and on-sells the assets to the obligor at a mark- up and on deferred payment terms. The economics of this product are similar to a fixed-term loan and the mark-up is almost invariably benchmarked against a conventional index such as Libor.

Because of its fixed-price nature, it is seen as more suitable for short tenures.

The assets are usually charged as security for the obligor’s payment obligations under the murabaha contract.

Used to purchase goods, for working capital and share finance.


A leasing structure where the bank acquires assets from a vendor at cost and leases the assets to the obligor for the duration of the financing.

Part of the rent payable is benchmarked as per the murabaha contract and the amount of rent due can be altered by the use of periodic notices.

The obligor usually undertakes to buy the assets back from the bank at maturity or on default, and the value to be paid for the assets is equal to the outstanding amount of the financing at the date of such purchase.

The structure is suitable for longer tenures and may be offered with floating rates of rent.

The assets are typically charged as security for the obligor’s payment obligations under the ijara contract.

Used to buy ships, aircraft, industrial equipment and real estate.


A diminishing partnership where the bank acquires assets jointly with the obligor from a vendor.

Their shares in the assets are proportionate to their capital contributions.

The bank leases its share in the assets to the obligor and the rent payable is benchmarked.

The obligor undertakes to purchase the bank’s share in the asset over time or as a bullet at the end of the financing.

This is the most flexible product as the principal payments (pursuant to the purchase undertaking) may be amortised and the rates may be floating.

Used to finance the purchase of houses, plants and machinery.