According to the Handelsblatt newspaper, German regulator Bafin, is to grant a full banking license to the Turkish bank, Kuveyt Turk Bank AG. The first branch of the bank is expected to be up and running in June, with branches planned for Frankfurt, Cologne and Berlin. The bank also plans to expand its services throughout Europe, according to a statement, released yesterday.
The bank’s guidelines will conform with sharia law. This means that it will not involve itself in speculative ventures or investments, and it cannot charge interest on loans, based on the Islamic teaching that a Muslim may not benefit from lending money or receiving money from someone else. Islamic banks may still purchase assets and resell them for a profit, however.
Islamic banks do not put any money into companies that produce alcohol or deal with pornography, gambling or pork and they also tend to stay away from companies with debts amounting to more than 30% of their own value.
According to Kemal Ozan, the managing director of Kuveyt Turk, the banks hopes to be popular with Germany’s four million Muslims – the largest Muslim community in Europe.
“Our market research has shown, that 21% of Muslims in this country would see an Islamic bank as their natural household bank,” Ozan said.
Britain remains Europe’s main Islamic finance hub, with five fully-fledged Islamic banks, and 20 banks that offers Islamic banking services.
The demand for Islamic banking is now increasing across the rest of Europe, due to the growing Muslim population on the continent. According to the U.S.-based Gatestone Institute, Islamic banking is growing faster in Britain, France and Germany than in many Islamic countries in the Middle East and Asia.
The sector is growing too among non-Muslims. The Islamic Bank of Britain reported a 55% increase in applications for its savings accounts by non-Muslims last year after the Barclays rate-fixing scandal.
Tim Sinclair, senior head of marketing and retail sales at Al Rayan bank, formerly the Islamic bank of Britain, says that over the last two years 83% of customers making fixed-term deposits were non-Muslims. Sinclair believes this is due to the ethical attraction of the bank. “We’re relatively small, and we tick the ethical box,” he says. “Being Sharia compliant means we’re not investing in bad things, and we’re transparent.”
The number of asylum seekers arriving in Germany, many from the Middle East, jumped to around 200,000 last year – four times as many as in 2012. Last week, German government statistics revealed that the proportion of the population without German citizenship is approaching 8.2 million – nearly 10% of the overall population. The number of foreign nationals living in Germany rose by more than half a million in 2014, the most in a single year since 1991 and 1992.