The UAE’s largest Islamic lender, Dubai Islamic Bank (DIB), has received proposals from the banks to help it raise funds through a potential US dollar-denominated sukuk issue.

The lender had sent out request for proposals late last year for a likely benchmark-sized debt transaction, which usually means upwards of $500m. It is expected to formally appoint banks for the transaction within a week or two, according to banking sources familiar with the situation.

It is not clear when DIB intends to print the paper, but one source said it will wait to see how investors react to Investment Corporation of Dubai (ICD’s) likely $1bn bond, which is expected to be concluded next week.

DIB had last tapped the market with the sale of a $500m, five-year shariah-compliant bond in March 2016, which was part of a $2.5bn sukuk programme. The paper offered a 3.6 per cent profit rate to investors. The lender also has an outstanding $300m, maturing imminently.

It is latest among GCC financial institutions that are looking to tap international debt market to shore up liquidity, which has been squeezed by lower oil prices.

Bahrain’s Gulf International Bank is already in the market to raise money while Kuwait’s Warba Bank has appointed banks for Islamic bond issue.