This year should see whether the Saadiyat free zone works a senior UAE-based diplomat recently said the project has not moved ahead quite so smoothly as had been hoped . There is speculation in the Emirates that the project might now become more real estate and e-commerce focused than being a purely financial play. Islamic banking has truly arrived when conservative European private banks offer Islamic savings funds and major players, such as Citibank and Arab Banking Corporation, emphasise their Islamic operations roles in complement to project financing and other conventional structures. By tapping Islamic liquidity, funds could be channelled into other growth sectors, such as project financing. Draft regulation on the issue, which requires maintaining a delicate consensus between the supervisors, the Islamic banks and the accounting profession on a set of criteria covering key areas of risk, is now being discussed.
Most Islamic banks welcome greater regulation.
Niche Islamic banks in the Gulf are preparing themselves for globalisation. Arthur Andersen, the external auditor, is expected to produce the group s first ever consolidated balance sheet by the end of 2000. Behind the move, executives say, is a recognition that Al Baraka must come into the age of globalised banking. Shamil Bank, too, is looking to compete on a global stage. Another sector exciting Gulf bankers is project finance.