Kenya gets a new bank – the Dubai Islamic Bank
In the latter part of 2015 the Central Bank of Kenya put on hold, until further notice, the issuance of license to operate to new banks. Accordingly, we speculated that the reason for that move was the case of Dubai Bank, a bank that was issued with a license to operate in 2014 and collapsed a year later. After reviewing the licensing process, CBK lifted the moratorium last month, allowing it to now announce the licensing of a new bank, the Dubai Islamic Bank.
Dubai Islamic Bank or DIB is a fully owned subsidiary of Dubai Islamic Bank PJSC (DIB PJSC) of the United Arab Emirates (UAE). DIB PJSC founded in 1975 is the first bank to have incorporated the principles of Islam in all its practices and is the largest Islamic Bank in the UAE, and in Kenya it becomes the third fully Shariah compliant bank to be licensed in Kenya, after Gulf African Bank Limited in 2007 and First Community Bank Limited in 2008.
In a statement justifying the license issued to DIB, CBK explained that as at September 2016, DIB PJSC had an asset base of USD47.6 billion (Ksh.4, 855 billion) and capital of USD7.4 billion (Ksh.754.8 billion) and has a presence in Bosnia, Indonesia, Pakistan, Sudan, Turkey and UAE.
“DIB PJSC’s entry into Kenya is anchored on its strategic focus of enhancing its international presence. Its business model is underpinned by excellence in customer service, innovation, growth and consistent employee engagement. CBK welcomes the entry of international brands such as DIB into the Kenyan banking sector”, reads the statement sent to CheteNet by CBK.
The entry of DIB not only gives Muslims and those interested in banking under Shariah law a third alternative for their banking needs, but also opens opportunities for businesses with interest in Bosnia, Indonesia, Pakistan, Sudan, Turkey and UAE. Pakistan is particularly interesting as it is a country with tough regulations on money transfer, and the presence of DIB both in Kenya and Pakistan may ease business processes between the two countries.
Additionally, DIBs entry should expand the offerings in the market, particularly in the nascent Shariah compliant banking niche. “This also signifies the first entry of a UAE bank in Kenya to support the long-standing economic ties between Kenya and the UAE. DIB’s choice of Kenya as its entry point into Sub-Saharan Africa signals Kenya’s growing stature as a premier regional financial services hub”, CBK explained.