Dubai Court Ruling Poses New Challenge for Islamic Banking

Although the recent ruling by the Dubai Court of Cassation (considered the Supreme Court of Dubai) has not generated much discussion in the Bangladeshi media, it could be a landmark development not just for the UAE, but for the entire global Islamic banking and finance sector. The ruling declares that Islamic banks, financial institutions, and Takaful (Islamic insurance) companies cannot charge any fines, fees, or compensation from customers for late payments. The court has categorized the matter under "public order," meaning it is such a fundamental principle that even if a contract contains contrary clauses or previous rulings permitted it, the court will not enforce them.