Germany's first Islamic bank to open in early 2010

Germany's first Islamic bank, a unit of Kuveyt Turk Bank of Turkey, is to open its doors in early 2010 in the southern city of Mannheim, an executive confirmed Tuesday. Under Islamic banking principles, interest on loans is forbidden and money cannot be lent to enterprises that flout Sharia law. Instead, borrowers must offer collateral and lenders receive a share of business profits. The unit will open by March at the latest in Mannheim, a factory city with a large ethnic Turkish population, Istanbul-based Kuveyt Turk Bank said. It would seek a full local banking licence for Germany later.

 

An area newspaper, Rhein Neckar Zeitung, broke the news. The bank executive, who asked not to be named, said Kuveyt Turk Bank intended to establish further branches in Germany, then in other European nations. Some German retail banks offered banking advice in Turkish, but walk-in branches with Islamic products would be new in the country. In Germany, 5 per cent of the 80-million-strong population has a Muslim background, according to Berlin government data. The Central Council of Muslims, an Islamic group, says its data show three quarters of them feel a strong bond to Islamic tradition and at least one fifth are interested in Islamic-approved investing.

 

The council said it was only a matter of time before German banks also realized there was a domestic retail market for Islamic banking investments, which are usually certified by Islamic scholars who review how they work to ensure they conform with Sharia. The certifiers also make sure the money is not being invested immorally, such as in gambling or sex, or in enterprises that are obviously on the brink of collapse. Germany's biggest bank, Deutsche Bank, runs a major Islamic investment arm, DWS Noor Islamic Funds, in the Middle East and North Africa. A German state, Saxony Anhalt, has raised 100 million euros (140 million dollars) internationally via a sukuk, or Islamic bond.

Link: http://www.earthtimes.org/articles/show/301380,germanys-first-islamic-bank-to-open-in-early-2010.html