Islamic Financial Intermediation and Banking 165
THE ROLES AND FUNCTIONS OF THE FINANCIAL
INTERMEDIARY ARE SUMMARIZED BELOW.■ (^) The distinction of the depositor is limited to demand deposits,
while the depositor is treated as an investor for all other type of
deposits.
■ (^) The depositor/investor can interact with the fi nancial interme-
diary as principal/agent, directing the fi nancial intermediary to
invest funds for a fee, or can become a partner with the fi nancial
intermediary in sharing risks and, therefore, profi ts and losses.
■ (^) The fi nancial intermediary can perform capital mobilization
through direct fi nancing or through the underwriting of market-
able securities. The fi nancial intermediary can construct diversi-
fi ed portfolios of assets with varying risks and maturities to match
the depositors/investors’ investment objectives.
■ (^) Given the basic building blocks of intermediation, an optimal and
effi cient intermediation can be implemented with a full spectrum of
commercial - and investment - banking activities. Given this, we can
say that intermediation resembles universal banking, with the major
difference being that even the commercial banking is conducted on
a risk-sharing basis and investment banking is encouraged.
TABLE 8.7 Dubai Islamic Bank: Balance sheet, December 2009
Dubai Islamic Bank
Annual Report as of Dec. 31, 2009
Assets AED’000
Cash and balances with Central Banks 11,611,570
Balances and deposits with banks and other fi nancial institutions 1,352,299
International murabahat with fi nancial institutions, short term 1,204,959
Islamic fi nancing and investing assets, net 49,924,941
Investments in Islamic sukuk 9,290,797
Investments in associates 4,295,168
Other investments 1,925,950
Properties under construction 388,648
Properties held for sale 157,269
Investment properties 1,996,288