gif Market Review
Turkey’s Expansion
Of Islamic Banking Source:
GlobalIslamicFinanceMagazine.com
Turkey is rapidly expanding its Islamic Banking sector as the coun- try has a long history in Islamic finance, despite the policy of Ataturk in Westernization of Turkish society after the abolition of the Islamic caliphate in 1923, Islam is rooted in the hearts of Turkish people and the population of Muslims constitute to 99 per cent. The Islamic financial sec- tor had an increase in saving banks by 25 billion dollars after 85 billion dollars, the savings are ex- pected to consti- tute 10 percent of the savings capital of Turkish banks. The number of Is- lamic banks in Tur- key has expanded to five banks, after the opening of Dubai Islamic Bank branch in Istanbul, according to the report of the Asso- ciation of the participating banks, which includes four banks, the estimated profits of these banks in 2009 to 470 billion dollars. The banks which have been set up in Turkey include Al Baraka ,the Bank of Asia,the World Bank Asya Kuwait Turkish.
The Minister for Foreign Trade, Zafer Kajlayan said that his country aims to increase the volume of foreign trade to a trillion The presi- dent praised the Turkish banking during the opening of the Fifth Con- ference of the banks and Islamic financial institutions in Damascus, adding that the Islamic financial institutions in Turkey integrated into the traditional banking sector and is an integral part of the finan- cial sector in Turkey, stressing his country’s keenness to exchange experiences with other countries to take advantage of to develop the work of Islamic banks and diversify their services and extend its reach in the world. Mr Yilmaz said that despite the difficulties cre- ated by the global financial crisis, the Islamic banking industry has expanded because of the foundations and the strong fundamentals
54 Global Islamic Finance October 2010
of it is based, is still able to compete and play an active role in the global banking system which could attract many inter- national bodies to participate in this experi- ment Banking . Yilmaz stressed the need for further efforts to increase capital transactions in Islamic banking and to develop the customer base and strengthen the regulatory framework for Islamic financial institu- tions in terms of creat- ing a network securi- ty systems and new insurance.
Aside from these P a r t i c i p a t i o n Banks, a growing number of Islamic finance houses now have a pres- ence in Turkey. In addition to Dubai Is- lamic Bank and ABC Is- lamic Bank, institutions such as Amlak Finance, Dubai Bank and the Na- tional Bank of Kuwait Capital have established representative offices, formed partnerships or are about to form partnerships in order to take an active role in the development of the sector
in Turkey.In December 2006, the Qatar-based Doha Bank
joined the league by officially opening its representative office in Is- tanbul. This followed the strategic alliance (in March 2006) between Dubai Bank and Turkey’s Daruma Corporate Finance to cooperate in structuring, executing and distributing of Shariah compliant corpo- rate finance and merchant banking services.
In addition, international banks such as BNP Paribas, Calyon and Deutsche Bank have joined ABN Amro, Citibank and HSBC in pro- moting Islamic finance as part of their mainstream product offer- ings. With the expansion of the Islamic banking sector in Turkey the country has sufficient scope to further diversify the sector of Islamic banking and finance and gain recognition from key international fi- nancial players around the world.
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