
Islamic Mega Bank
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Turkish Deputy Prime Minister Ali Babacan speaking at the Participation Banks Association of Turkey in Istanbul, said Turkey, Indonesia and the Islamic Development Bank have accelerated their efforts to establish a “megabank” with the aim of creating a platform to serve as a “central bank” for the world’s Islamic lenders.
His remarks came after one of Turkey’s largest state-controlled banks, Ziraat Bank, was authorized by the country’s banking regulator to start operations in its Islamic banking division last week. The Banking Regulation and Supervision Agency issued a certificate giving permission to Ziraat Bank to commence operations as an Islamic bank.
Last year, the agency allowed Ziraat and its sister companies – Ziraat Insurance, Ziraat Savings, Ziraat Investment and Ziraat Technology – to establish the new Islamic bank as main shareholders with a capital of $300 million.
Babacan also stated that an insurance system should also be developed using interest-free practice. “We believe this sector will also be developed in the upcoming period. We are ready to give every kind of support to this.”
Al-Rajhi Bank, the world’s largest Islamic bank in terms of assets and balance sheet, though as a illustration all Islamic banks and assets combined do not have a market capitalisation of HSBC.
Turkeys Islamic Lenders
Turkey has four existing private Islamic lenders, Turk, Bank Asya, Turkiye Finans and Kuveyt Turk who jointly have a network of 1,000 branches employing more than 16,000 people. Two state banks, Halkbank and Ziraat Bank plan to launch Islamic windows later this year. A third state run bank Vakifbank will be the third new entrant after the Turkish banking regulator recently approved its application to offer Islamic banking services.