DUBAI: Emirates Islamic Bank (EIB), a unit of Emirates NBD, proposed a 1.1 billion dirham ($299.6 million) rights issue yesterday in the latest move by Gulf banks to raise capital in the wake of the financial crisis.

EIB said that shareholders would review the issue at an extraordinary meeting scheduled for June 28, and would vote on cancelling a previous proposal to issue 565.6m shares at the same time.

Parent bank Emirates NBD said in March it would seek to raise about 3bn dirhams next year through debt issues in order to meet central bank requirements to increase its capital adequacy ratio.

The UAE central bank has told banks to increase their capital adequacy ratio to a minimum of 11 per cent by June 30, and to a minimum of 12pc by June 30, next year.

Emirates NBD has already said it would convert $1.72bn of UAE government deposits into Tier 2 capital as part of a larger programme sponsored by the Ministry of Finance last year to boost liquidity in the banking system.