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UAE financial system development

Money and Banking

Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc416173346” Introduction PAGEREF _Toc416173346 h 2

HYPERLINK l “_Toc416173347” Historical discussion of evolving process of UAE financial structure PAGEREF _Toc416173347 h 2

HYPERLINK l “_Toc416173348” History of Dirham PAGEREF _Toc416173348 h 3

HYPERLINK l “_Toc416173349” Banking system PAGEREF _Toc416173349 h 5

HYPERLINK l “_Toc416173350” Central banking functions PAGEREF _Toc416173350 h 6

HYPERLINK l “_Toc416173351” Conclusion PAGEREF _Toc416173351 h 7

HYPERLINK l “_Toc416173352” References PAGEREF _Toc416173352 h 8

IntroductionGlobalization is one of the most significant factor that provide immense impact on overall financial system because with the help of the drivers of globalization various investors provide infrastructure to invest in UAE marketplace and it helps in overall development of economic infrastructure (Ahmad, ur Rehman & Saif, 2010). However, in these current times UAE is one of the best financial business hubs, and the evolving process is development is done by the heavyweight investors. On the other hand, regulatory authorities also provided valuable construction for the business culture development because they have provided some advantage to the sectors regarding taxation and approval legislation (Al-Tamimi & Hussein, 2010). Therefore, UAE becomes one of the most suitable places for doing business and due to the huge popularity and extraordinary infrastructure of investment makes UAE the best financial hub.

Historical discussion of evolving process of UAE financial structureMacroeconomic and financial sector development is achieved by UAE and mainly the financial sectors were well structured and most importantly, the systemic risk was minute because overall legal and judicial system was reformed by the regulatory authorities (Al-Tamimi & Hussein, 2010). There is a huge need for the proper legal system to run all the business sectors smoothly and for this particular reason the banking system development is done which simultaneously help in overall economic infrastructure development. In the year of 2001, the supervisory program is conduct by the banking sector and some components such as banks debt, operational and current market risk were identified and as per the requirement further development is done. Security system plays an important role in development of financial infrastructure and for this particular purpose the payment system development is done by the authorities and, therefore, the technological advancement is taking place, and it also help to secure the payment function (Al-Tamimi, Hussein & Jellali, 2013). However, there is some microeconomic development conducted by developing several policies and development strategies. With the help of innovative strategies massive economic growth is achieved by UAE and increase in overall GDP is also observed. Oil export revenue also played an important role for overall financial infrastructure development and the actual GDP is increased by 9.5 percent that is the highest among various GCC countries (Delis, 2010).

Figure- GDP growth

Source- HYPERLINK “http://www.uaegdp.com/info” www.uaegdp.com/info

There is another development is conducted by the regulatory authority in 2002 by announcing UAE a financial hub and establishment of Dubai International Financial Centre (DIFC) and also Federal financial free zone is developed which help to attract maximum amount of investors and businessman to invest in Dubai marketplace (Al-Tamimi & Hussein, 2010) as the demand of the market is very huge and there are fewer chances of loss as the current GDP rate is very huge, therefore, is become a spiritual place for the investor to invest and for the business man to make business in UAE countries (‘Reforming the international financial system for development’, 2011).

History of DirhamDirham was the Persian currency and was used before and after the appearance of Islam in Arabia. During the caliphate of ‘Ali ibn Abi Talib’ new coin with the name of Islamic government engraved on them. The places of coinage were written on both sides of these coins in the Kufic script (Al-Tamimi, Hussein & Jellali, 2013). Dirham has been the coin of year 40 AH, so it is also the first independent coin minted during the caliphate of ‘Ali ibn Abi Talib’. At the end of his caliphate, the coin was not continued after his death. The Islamic dirham was not accepted as the regular currency (Goaied & Sassi, 2010). Instead, Sassanid dirham was continued to be used as money till the caliphate of ‘Abd al-Malik ibn Marwan’.

The variety of Sassanid dirham was used in early years of Islamic rule, differing in weight and value (Delis, 2010). The Baghli dirham was mint under the order of ‘Umar ibn al-Khattab’. The recoinage of Wafi dirham weighted 20 karats and contained eight deneghs. The Tabri dirham was recoined by Khalid ibn al-Walid in year 15 AH, weighted ten karats and four daneghs. The juraghi dirham was weighted 12 karats and 4.5 daneghs. Other three was also used Maghribi, and Yamani dirham contained one and three dirham.

According to the jurist, the variation in the value of dirham led to the difficulty in estimation of financial, religious duties. The rate and range of arms were clarified ‘ Umar ibn al-Khattab, the second caliph ordered that dirham will be widely used and the legal dirham based on the average of the dirham (Hasan & Dridi, 2010). The legal dirham was not coined legal till 74 AH during Ummayad caliphate. The Large number of Islamic dirham was minted during the caliphate of ‘Abd al-Malik ibn Marwan’. About 30 dirham was selected from three different variety types weighing 10, 5 and five mithqals (Delis, 2010).

The variety of dirham was considered during the time of Prophet and had not led to any difficulty in estimation of scope and rate of alms- tax. At that time, six daneghs was considered as one dirham and credit of dirham was used to estimate the rate and value of alms tax. The same ratio had been practicable during the second caliph without minting the new dirham (Goaied & Sassi, 2010). From the records, the Islamic government did not have their coins (Kashani & Obay, 2010). This is seen in the ‘ABD al Malik ibn Marwan, was the only Roman emperor who could mint the coin then circulating.

After the formation United Arab Emirates, the UAE dirham was made official currency. It was circulated in the place of Bahraini Dinar @ 10 UAE dirham = 1 Bahraini Dinars and in the place of Qatar-Dubai royal at par (Goaied & Sassi, 2010). United Arab Emirates currency board since issued the currency in the year 1982 under the authority issuing the currency in the hands of United Arab Bank (Lange & Fierro, 2009). It is mostly pegged to US dollar, and the exchange rate is between them, i.e., 1 US dollar = 3.67 UAE dirham and has not varied since 1980s (Hasan & Dridi, 2010).

Dirham has been the very important currency in the Islamic world and Middle East and prime medium of exchange since ages. The dirham word was taken up from word “dirhem” name of an ancient Greek coin.

Banking systemBanks plays an important role in the security of any nation’s economy. Banks most significant role is in stimulating growth (Kashani & Obay, 2010). Banks provide financial help to the firms and assisting in the procedure of the entire economy to expand. The viewpoint of UAE banking system stay stable, and no alteration is taken place from 2013. Banks of UAE directly employed 35,000 specialist staff members apart from supplementary personnel of mid-2013 more than doubling-up from 14,000 workers in 2005 (Kashani & Obay, 2010). These huge demands in the banking sector emphasise the working capability of the people in the country. Banks enlarges the financial growth of the country, by granting capital from the individuals of the country and using the capital in the well-being of the country and also provides the interest to the individuals, moreover the efficiency of the procedure by which the saving are means into productive economy actions is critical for the nation’s enduring-term growth panorama. Banks execute a significant role in terms of temporary saving into long-standing saving. The banking system of UAE held US$350 billion in consumer deposit in the middle of 2013 and had a stupendous loan of near about US$320 billion (Kashani & Obay, 2010). Banks also plays a significant role in the management of risk in the economy and helps in assortment and smooth variation eventually (Kashani & Obay, 2010). Banks set up enduring term relationship with their customers firm. Impartiality by the banks and preserving of money owing adds to superb corporate discipline and governance (Loghod, 2010). Enduring term relationship persist helpful and active interference by a bank must its customer become financially upset. The government of UAE provide full support to the banks in assisting to their consumers or clients. The staff members of the UAE Banks know each and every customer and understand their individual needs and offer exact products that would get together their needs. Banks provide credit only if they are fully pleased that their consumers would have the potential to pay back the capital that they have obtained from the bank to credit (Mehta, 2012). Banks helps the customers to decide the simplest and most helpful suitable ways for them to demeanor their banking desires. The management of the bank should maintain and expand the professional information and abilities to their staff members, which would be helpful in providing customer satisfaction. The customers of the Banks of UAE should treat the facilities, tools and property of the bank very carefully (Loghod, 2010). The customers also play an important role in the enlargement of the banking system. Moreover, the banking system is not free enough from the problems. International Monetary Fund (IMF) has affirmative clarifications about the willingness of the UAE monetary and the banking segments to be the ingredient of the worldwide system. Hence, the banking system provides a great support to their customers (Parashar, 2010). Thus the banks of UAE obtain profitable capital, well guided and get the full support from the central bank (Mehta, 2012).

Central banking functionsThe core function of Central is to create as well as implement the policies regarding banking credit and monitor (Rettab, Kashani, Obay & Rao, 2010). The policies are created to secure the steady development of the national economy of United Arab Emirates. The central bank was also responsible for maintaining a firm exchange rate of Dirham against $ United State as well as ensure priceless conversion between the national currency and foreign currency (Parashar, 2010). Beside this, the Central Bank plays a role of a bank of all another bank as well as plays a role of Government Bank and as a financial advisor (Rettab, Kashani, Obay & Rao, 2010). There are several laws and regulation governing the functions of the entire banking industry a financial institute, as well as the Central Bank, regularly keep an eye on the monetary data and statistical banking via the bulletin of monthly statistics. There are several banks, which are supervised by The Central Bank (Rettab, Kashani, Obay & Rao, 2010). The fiscal policies of Saudi Monetary Agency (SAMA) mainly rely on the variations of the reserve ratio needs. The control over the credit is utilized rules of credit ceiling, terms and condition of the transaction of the consumers, cash margin, credit limit, restriction on particular categories of loans as well as firming the assets holding by each bank within the kingdom (Zeitun, 2012). The Saudi Monetary Agency (SAMA) utilizes a tool called ORR (Official Repo Rate) for managing short duration liquidity. For regulating the supply of the finance, Saudi Monetary Agency (SAMA) deploys its accounts as well as Government deposits with the commercial bank. The Central Bank direct the fiscal policies along with credit and banking policies and keep an eye over its implementation according to the state general policy in such manner that it support the national economy and firmness of the national currency (Rettab, Kashani, Obay & Rao, 2010). For the achievement of the objectives, the above said laws authorize the Central Bank for:

The Central Bank has the privilege of issuing currency. For supporting the national currency, the Central Bank keeps its stability externally as well as internally and secures its priceless conversion with the foreign currencies (Sabri, 2010). For attaining a stable development of the national economy, the Central Bank forms the direct credit policies in special ways. The Central Bank promotes, organize as well as supervise over the efficiency of the banking system. The Central Bank undertakes the function of the government bank within the restriction of the law (Rettab, Kashani, Obay & Rao, 2010). The Central Bank often advises the National Government on fiscal and financial issues. The Central Bank maintains the reserve of gold and foreign currency of the national Government. The Central Bank Act as a bank of all other banks, which are operating in the country. The Central Bank Act as the states finance agents at the International Monetary Fund and the International Bank for reconstruction and development as well as with other international and Arab funds and financial institute and run the dealing of the state with such organization (Sabri, 2010). In these way, the Central Bank of United Arab Emirates governs the economic system with the support of the Islamic law.

ConclusionThe paper provides a clear and concise idea of the evolving historical development of UAE financial infrastructure as well as the banking system and central banking system. It is evident from various researchers that banking system development is highly required that help in the development of the financial system. The regulatory authorities also play an important role by providing reliable legislations to the investors and businesspersons to invest huge amount of capital in UAE market because several advantages are provided to them that attracts the giant investors to make business in UAE countries.

ReferencesAhmad, A., ur Rehman, K., & Saif, M. I. (2010). Islamic banking experience of Pakistan: comparison between Islamic and conventional banks. International Journal of Business and Management, 5(2), p137. Retrieved April 5, 2015

Al-Tamimi, H., & Hussein, A. (2010). Factors influencing performance of the UAE Islamic and conventional national banks. Global Journal of Business Research, 4(2), 1-9.

Retrieved April 5, 2015

Al-Tamimi, H., Hussein, A., & Jellali, N. (2013). The Effects of Ownership Structure and Competition on Risk-Taking Behavior: Evidence from UAE Conventional and Islamic Banks. The International Journal of Business and Finance Research, 7(2), 115-124.

Retrieved April 5, 2015

Delis, M. D. (2010). Competitive conditions in the Central and Eastern European banking systems. Omega, 38(5), 268-274. Retrieved April 5, 2015

Goaied, M., & Sassi, S. (2010). Financial development and economic growth in the MENA region: What about Islamic banking development. Institut des Hautes Etudes Commerciales, Carthage. Retrieved April 5, 2015

Hasan, M. M., & Dridi, J. (2010). The effects of the global crisis on Islamic and conventional banks: A comparative study. IMF Working Papers, 1-46. Retrieved April 5, 2015

Kashani, H. A., & Obay, L. A. (2010). An Analysis of Productivity Change: Are UAE Banks Operating Efficiently When Compared to GCC Banks?. Academy of Banking Studies Journal, 9(1-2), 13. Retrieved April 5, 2015

Loghod, H. A. (2010). Do Islamic Banks Perform Better than Conventional Banks? Evidence from Gulf Cooperation Council countries. Journal of Management, 7(3), 56-72.

Retrieved April 5, 2015

Mehta, A. (2012). Financial Performance of UAE Banking Sector-A Comparison of before and during Crisis Ratios. International Journal of Trade, economics and Finance, 3(5). Retrieved April 5, 2015

Parashar, S. P. (2010). How did Islamic banks do during global financial crisis?. Banks and Bank systems, 5(4), 54-62. Retrieved April 5, 2015

Rettab, B., Kashani, H., Obay, L., & Rao, A. (2010). Impact of market power and efficiency on performance of banks in the Gulf cooperation council countries. International Research Journal of Finance and Economics, 50, 190-203. Retrieved April 5, 2015

Sabri, N. R. (2010). The role of banking sector in the Arab economic development. International Journal of Business and Emerging Markets, 2(2), 180-192. Retrieved April 5, 2015

Zeitun, R. (2012). Determinants of Islamic and conventional banks performance in GCC countries using panel data analysis. Global Economy and Finance Journal, 5(1), 53-72. Retrieved April 5, 2015

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Money and Banking

Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc416173346” Introduction PAGEREF _Toc416173346 h 2

HYPERLINK l “_Toc416173347” Historical discussion of evolving process of UAE financial structure PAGEREF _Toc416173347 h 2

HYPERLINK l “_Toc416173348” History of Dirham PAGEREF _Toc416173348 h 3

HYPERLINK l “_Toc416173349” Banking system PAGEREF _Toc416173349 h 5

HYPERLINK l “_Toc416173350” Central banking functions PAGEREF _Toc416173350 h 6

HYPERLINK l “_Toc416173351” Conclusion PAGEREF _Toc416173351 h 7

HYPERLINK l “_Toc416173352” References PAGEREF _Toc416173352 h 8

IntroductionGlobalization is one of the most significant factor that provide immense impact on overall financial system because with the help of the drivers of globalization various investors provide infrastructure to invest in UAE marketplace and it helps in overall development of economic infrastructure (Ahmad, ur Rehman & Saif, 2010). However, in these current times UAE is one of the best financial business hubs, and the evolving process is development is done by the heavyweight investors. On the other hand, regulatory authorities also provided valuable construction for the business culture development because they have provided some advantage to the sectors regarding taxation and approval legislation (Al-Tamimi & Hussein, 2010). Therefore, UAE becomes one of the most suitable places for doing business and due to the huge popularity and extraordinary infrastructure of investment makes UAE the best financial hub.

Historical discussion of evolving process of UAE financial structureMacroeconomic and financial sector development is achieved by UAE and mainly the financial sectors were well structured and most importantly, the systemic risk was minute because overall legal and judicial system was reformed by the regulatory authorities (Al-Tamimi & Hussein, 2010). There is a huge need for the proper legal system to run all the business sectors smoothly and for this particular reason the banking system development is done which simultaneously help in overall economic infrastructure development. In the year of 2001, the supervisory program is conduct by the banking sector and some components such as banks debt, operational and current market risk were identified and as per the requirement further development is done. Security system plays an important role in development of financial infrastructure and for this particular purpose the payment system development is done by the authorities and, therefore, the technological advancement is taking place, and it also help to secure the payment function (Al-Tamimi, Hussein & Jellali, 2013). However, there is some microeconomic development conducted by developing several policies and development strategies. With the help of innovative strategies massive economic growth is achieved by UAE and increase in overall GDP is also observed. Oil export revenue also played an important role for overall financial infrastructure development and the actual GDP is increased by 9.5 percent that is the highest among various GCC countries (Delis, 2010).

Figure- GDP growth

Source- HYPERLINK “http://www.uaegdp.com/info” www.uaegdp.com/info

There is another development is conducted by the regulatory authority in 2002 by announcing UAE a financial hub and establishment of Dubai International Financial Centre (DIFC) and also Federal financial free zone is developed which help to attract maximum amount of investors and businessman to invest in Dubai marketplace (Al-Tamimi & Hussein, 2010) as the demand of the market is very huge and there are fewer chances of loss as the current GDP rate is very huge, therefore, is become a spiritual place for the investor to invest and for the business man to make business in UAE countries (‘Reforming the international financial system for development’, 2011).

History of DirhamDirham was the Persian currency and was used before and after the appearance of Islam in Arabia. During the caliphate of ‘Ali ibn Abi Talib’ new coin with the name of Islamic government engraved on them. The places of coinage were written on both sides of these coins in the Kufic script (Al-Tamimi, Hussein & Jellali, 2013). Dirham has been the coin of year 40 AH, so it is also the first independent coin minted during the caliphate of ‘Ali ibn Abi Talib’. At the end of his caliphate, the coin was not continued after his death. The Islamic dirham was not accepted as the regular currency (Goaied & Sassi, 2010). Instead, Sassanid dirham was continued to be used as money till the caliphate of ‘Abd al-Malik ibn Marwan’.

The variety of Sassanid dirham was used in early years of Islamic rule, differing in weight and value (Delis, 2010). The Baghli dirham was mint under the order of ‘Umar ibn al-Khattab’. The recoinage of Wafi dirham weighted 20 karats and contained eight deneghs. The Tabri dirham was recoined by Khalid ibn al-Walid in year 15 AH, weighted ten karats and four daneghs. The juraghi dirham was weighted 12 karats and 4.5 daneghs. Other three was also used Maghribi, and Yamani dirham contained one and three dirham.

According to the jurist, the variation in the value of dirham led to the difficulty in estimation of financial, religious duties. The rate and range of arms were clarified ‘ Umar ibn al-Khattab, the second caliph ordered that dirham will be widely used and the legal dirham based on the average of the dirham (Hasan & Dridi, 2010). The legal dirham was not coined legal till 74 AH during Ummayad caliphate. The Large number of Islamic dirham was minted during the caliphate of ‘Abd al-Malik ibn Marwan’. About 30 dirham was selected from three different variety types weighing 10, 5 and five mithqals (Delis, 2010).

The variety of dirham was considered during the time of Prophet and had not led to any difficulty in estimation of scope and rate of alms- tax. At that time, six daneghs was considered as one dirham and credit of dirham was used to estimate the rate and value of alms tax. The same ratio had been practicable during the second caliph without minting the new dirham (Goaied & Sassi, 2010). From the records, the Islamic government did not have their coins (Kashani & Obay, 2010). This is seen in the ‘ABD al Malik ibn Marwan, was the only Roman emperor who could mint the coin then circulating.

After the formation United Arab Emirates, the UAE dirham was made official currency. It was circulated in the place of Bahraini Dinar @ 10 UAE dirham = 1 Bahraini Dinars and in the place of Qatar-Dubai royal at par (Goaied & Sassi, 2010). United Arab Emirates currency board since issued the currency in the year 1982 under the authority issuing the currency in the hands of United Arab Bank (Lange & Fierro, 2009). It is mostly pegged to US dollar, and the exchange rate is between them, i.e., 1 US dollar = 3.67 UAE dirham and has not varied since 1980s (Hasan & Dridi, 2010).

Dirham has been the very important currency in the Islamic world and Middle East and prime medium of exchange since ages. The dirham word was taken up from word “dirhem” name of an ancient Greek coin.

Banking systemBanks plays an important role in the security of any nation’s economy. Banks most significant role is in stimulating growth (Kashani & Obay, 2010). Banks provide financial help to the firms and assisting in the procedure of the entire economy to expand. The viewpoint of UAE banking system stay stable, and no alteration is taken place from 2013. Banks of UAE directly employed 35,000 specialist staff members apart from supplementary personnel of mid-2013 more than doubling-up from 14,000 workers in 2005 (Kashani & Obay, 2010). These huge demands in the banking sector emphasise the working capability of the people in the country. Banks enlarges the financial growth of the country, by granting capital from the individuals of the country and using the capital in the well-being of the country and also provides the interest to the individuals, moreover the efficiency of the procedure by which the saving are means into productive economy actions is critical for the nation’s enduring-term growth panorama. Banks execute a significant role in terms of temporary saving into long-standing saving. The banking system of UAE held US$350 billion in consumer deposit in the middle of 2013 and had a stupendous loan of near about US$320 billion (Kashani & Obay, 2010). Banks also plays a significant role in the management of risk in the economy and helps in assortment and smooth variation eventually (Kashani & Obay, 2010). Banks set up enduring term relationship with their customers firm. Impartiality by the banks and preserving of money owing adds to superb corporate discipline and governance (Loghod, 2010). Enduring term relationship persist helpful and active interference by a bank must its customer become financially upset. The government of UAE provide full support to the banks in assisting to their consumers or clients. The staff members of the UAE Banks know each and every customer and understand their individual needs and offer exact products that would get together their needs. Banks provide credit only if they are fully pleased that their consumers would have the potential to pay back the capital that they have obtained from the bank to credit (Mehta, 2012). Banks helps the customers to decide the simplest and most helpful suitable ways for them to demeanor their banking desires. The management of the bank should maintain and expand the professional information and abilities to their staff members, which would be helpful in providing customer satisfaction. The customers of the Banks of UAE should treat the facilities, tools and property of the bank very carefully (Loghod, 2010). The customers also play an important role in the enlargement of the banking system. Moreover, the banking system is not free enough from the problems. International Monetary Fund (IMF) has affirmative clarifications about the willingness of the UAE monetary and the banking segments to be the ingredient of the worldwide system. Hence, the banking system provides a great support to their customers (Parashar, 2010). Thus the banks of UAE obtain profitable capital, well guided and get the full support from the central bank (Mehta, 2012).

Central banking functionsThe core function of Central is to create as well as implement the policies regarding banking credit and monitor (Rettab, Kashani, Obay & Rao, 2010). The policies are created to secure the steady development of the national economy of United Arab Emirates. The central bank was also responsible for maintaining a firm exchange rate of Dirham against $ United State as well as ensure priceless conversion between the national currency and foreign currency (Parashar, 2010). Beside this, the Central Bank plays a role of a bank of all another bank as well as plays a role of Government Bank and as a financial advisor (Rettab, Kashani, Obay & Rao, 2010). There are several laws and regulation governing the functions of the entire banking industry a financial institute, as well as the Central Bank, regularly keep an eye on the monetary data and statistical banking via the bulletin of monthly statistics. There are several banks, which are supervised by The Central Bank (Rettab, Kashani, Obay & Rao, 2010). The fiscal policies of Saudi Monetary Agency (SAMA) mainly rely on the variations of the reserve ratio needs. The control over the credit is utilized rules of credit ceiling, terms and condition of the transaction of the consumers, cash margin, credit limit, restriction on particular categories of loans as well as firming the assets holding by each bank within the kingdom (Zeitun, 2012). The Saudi Monetary Agency (SAMA) utilizes a tool called ORR (Official Repo Rate) for managing short duration liquidity. For regulating the supply of the finance, Saudi Monetary Agency (SAMA) deploys its accounts as well as Government deposits with the commercial bank. The Central Bank direct the fiscal policies along with credit and banking policies and keep an eye over its implementation according to the state general policy in such manner that it support the national economy and firmness of the national currency (Rettab, Kashani, Obay & Rao, 2010). For the achievement of the objectives, the above said laws authorize the Central Bank for:

The Central Bank has the privilege of issuing currency. For supporting the national currency, the Central Bank keeps its stability externally as well as internally and secures its priceless conversion with the foreign currencies (Sabri, 2010). For attaining a stable development of the national economy, the Central Bank forms the direct credit policies in special ways. The Central Bank promotes, organize as well as supervise over the efficiency of the banking system. The Central Bank undertakes the function of the government bank within the restriction of the law (Rettab, Kashani, Obay & Rao, 2010). The Central Bank often advises the National Government on fiscal and financial issues. The Central Bank maintains the reserve of gold and foreign currency of the national Government. The Central Bank Act as a bank of all other banks, which are operating in the country. The Central Bank Act as the states finance agents at the International Monetary Fund and the International Bank for reconstruction and development as well as with other international and Arab funds and financial institute and run the dealing of the state with such organization (Sabri, 2010). In these way, the Central Bank of United Arab Emirates governs the economic system with the support of the Islamic law.

ConclusionThe paper provides a clear and concise idea of the evolving historical development of UAE financial infrastructure as well as the banking system and central banking system. It is evident from various researchers that banking system development is highly required that help in the development of the financial system. The regulatory authorities also play an important role by providing reliable legislations to the investors and businesspersons to invest huge amount of capital in UAE market because several advantages are provided to them that attracts the giant investors to make business in UAE countries.

ReferencesAhmad, A., ur Rehman, K., & Saif, M. I. (2010). Islamic banking experience of Pakistan: comparison between Islamic and conventional banks. International Journal of Business and Management, 5(2), p137. Retrieved April 5, 2015

Al-Tamimi, H., & Hussein, A. (2010). Factors influencing performance of the UAE Islamic and conventional national banks. Global Journal of Business Research, 4(2), 1-9.

Retrieved April 5, 2015

Al-Tamimi, H., Hussein, A., & Jellali, N. (2013). The Effects of Ownership Structure and Competition on Risk-Taking Behavior: Evidence from UAE Conventional and Islamic Banks. The International Journal of Business and Finance Research, 7(2), 115-124.

Retrieved April 5, 2015

Delis, M. D. (2010). Competitive conditions in the Central and Eastern European banking systems. Omega, 38(5), 268-274. Retrieved April 5, 2015

Goaied, M., & Sassi, S. (2010). Financial development and economic growth in the MENA region: What about Islamic banking development. Institut des Hautes Etudes Commerciales, Carthage. Retrieved April 5, 2015

Hasan, M. M., & Dridi, J. (2010). The effects of the global crisis on Islamic and conventional banks: A comparative study. IMF Working Papers, 1-46. Retrieved April 5, 2015

Kashani, H. A., & Obay, L. A. (2010). An Analysis of Productivity Change: Are UAE Banks Operating Efficiently When Compared to GCC Banks?. Academy of Banking Studies Journal, 9(1-2), 13. Retrieved April 5, 2015

Loghod, H. A. (2010). Do Islamic Banks Perform Better than Conventional Banks? Evidence from Gulf Cooperation Council countries. Journal of Management, 7(3), 56-72.

Retrieved April 5, 2015

Mehta, A. (2012). Financial Performance of UAE Banking Sector-A Comparison of before and during Crisis Ratios. International Journal of Trade, economics and Finance, 3(5). Retrieved April 5, 2015

Parashar, S. P. (2010). How did Islamic banks do during global financial crisis?. Banks and Bank systems, 5(4), 54-62. Retrieved April 5, 2015

Rettab, B., Kashani, H., Obay, L., & Rao, A. (2010). Impact of market power and efficiency on performance of banks in the Gulf cooperation council countries. International Research Journal of Finance and Economics, 50, 190-203. Retrieved April 5, 2015

Sabri, N. R. (2010). The role of banking sector in the Arab economic development. International Journal of Business and Emerging Markets, 2(2), 180-192. Retrieved April 5, 2015

Zeitun, R. (2012). Determinants of Islamic and conventional banks performance in GCC countries using panel data analysis. Global Economy and Finance Journal, 5(1), 53-72. Retrieved April 5, 2015

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