Kuveyt Türk, a Turkey based Islamic bank, is set to become the first such financial institution to get a license to operate in Germany, according to a report in the Handelsblatt daily released before publication.
Kuveyt Türk Bank AG is set to get approval from the German financial regulator Bafin, reports the newspaper in advance of its Monday edition.
The bank, which operates under guidelines that conform to sharia law, already has a branch operating in the southwestern city of Mannheim. But the regulator's approval would allow it to work as a fully operational bank. It reported already has plans to open offices in Berlin, Cologne and Frankfurt.
Banks that operate under Islamic principles, also known as participation banks, do not engage in speculative investments or investments in ventures that do not correspond to Islamic tenets. Interest cannot be charged on loans, though the bank may purchase assets from a customer and then resell them for a profit.
Kuveyt Türk head Kemal Ozan said there is potentially great demand for his institution's services, especially among the 4 million Muslims living in Germany.
"Our market research has shown that 21 percent of the Muslims in this country [Germany] would see an Islamic bank as their natural household bank," he told the newspaper. Past analyses of the market indicated a potential market volume of 1.6 billion euros.
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