ADIB chief urges UAE to widen provision of short-term liquidity to Islamic lenders

Tirad Al Mahmoud, chief executive of Abu Dhabi Islamic Bank, has urged the Central Bank to broaden its provision of short-term liquidity to Sharia-compliant lenders. The UAE should also offer longer-term funding facilities to Islamic banks so as to improve their business capability, he added. The Central Bank allows Islamic banks to park Sharia-compliant assets on its balance sheet in exchange for profit. This is only available on an overnight basis. The central banks of the UAE and Bahrain recently introduced a series of short-term treasury management tools to help Islamic lenders to manage their cash flows. Bahrain and the UAE are the only countries in the region whose central banks offer liquidity tools to Islamic lenders.