The UAE Islamic finance strategy sets a target of Dh2.56 trillion in local Islamic bank assets by 2031, part of a wider effort to root Shari’ah-compliant finance deeper in the national economy. Islamic banking assets in the country stood at Dh1.4 trillion as of June 2026, and 43 Islamic financial institutions now hold licences. The UAE ranked third worldwide in the Islamic Finance Development Indicator for 2025. Those figures give the plan a base to build from.
Targets under the plan sit inside the UAE Strategy for Islamic Finance and Halal Industry 2025 to 2031, which the Cabinet approved in May 2025. The Central Bank of the UAE is coordinating with federal and local bodies to tie Islamic finance and the halal industry more closely to the broader economic agenda. Two goals run through it. Scale the sector, and give it firmer legal ground.
Clearer rules under the UAE Islamic finance strategy
Much of the UAE Islamic finance strategy turns on legal and Shari’ah certainty. The Commercial Transactions Law, Federal Decree-Law No. 50 of 2022, carries a dedicated chapter on Islamic finance contracts and financing arrangements. It ties parts of the law to Shari’ah standards issued by the Higher Shari’ah Authority and sets out how to read those provisions and settle disputes. Once the Higher Shari’ah Authority approves them, the Central Bank can issue regulations of its own.
The framework works toward clearer rights and obligations, standard Shari’ah interpretations, and fewer legal disputes tied to Islamic financial transactions. For customers and banks alike, that means fewer grey areas.
Costs and supervision
The Central Bank Law, Federal Decree-Law No. 6 of 2025, governs how Islamic financial institutions operate and how supervisors oversee them. Under its terms, these institutions can handle transactions involving real estate and goods where a Shari’ah-compliant structure calls for it. The law also exempts Islamic financial transactions from registration requirements and similar fees or costs. Customer protection ranks among the framework’s stated goals, next to stronger trust in Islamic finance services and a legal setting that supports new products.
Established at the Central Bank in 2018, the Higher Shari’ah Authority works to bring Shari’ah practice into line across institutions. It has issued more than 280 standards and resolutions to govern Islamic financial transactions and narrow differences in interpretation, along with more than nine Shari’ah governance standards. Prudential standards covering financial integrity, risk management and stability complete the supervisory base.
Beyond banking
The UAE Islamic finance strategy reaches past the banks. Plans under it develop the market for sukuk, Islamic money markets and Islamic funds, while backing larger and more competitive institutions. Sukuk issuances form a central part of that ambition. The plan also draws Islamic finance in the UAE closer to the halal economy. It calls for more local production of high-value halal goods, a halal traceability system to support re-exports, and added backing for SMEs and technology startups in the sector.
Set against the region, the direction fits a pattern. Islamic finance in the UAE is shifting from a parallel channel toward a core part of how the economy raises and moves capital. The UAE Islamic finance strategy puts a number and a date on that move, and Dh2.56 trillion is the figure to watch.
