Frankfurt: Europe’s first fully-functional Islamic bank will soon open its doors in Frankfurt, offering German Muslims the opportunity to use a bank that complies with sharia law for the first time, a media report said.
Kuveyt Turk Bank is preparing to open its German branch on July 1, making it the first sharia-compliant bank in a European country, according to the World Finance. Kuwait Finance House owns a majority stake in Kuveyt Bank.
The branch, which will operate under the name KT Bank AG, can only be backed by tangible assets and shall refrain from speculative investments, in accordance with Islamic banking rules. Charging interest on loans is also not permitted, although the bank is allowed to purchase and sell assets for a profit.
Additionally, activities that are considered un-Islamic, such as participation in forbidden goods, services and projects, including businesses within the gambling and alcohol industries, are strictly prohibited.
Kuveyt Turk Bank currently has another branch in Mannheim, although it is not fully functional under sharia law.
As well as the four million Muslims living in Germany that form the targeted customer base for the bank, services will also be available for non-Muslims, including retail and wholesale customers.
Islamic bonds, known as sukuk, have become increasingly attractive for both Muslims and non-Muslims in recent years, given their fast rate of growth. According to Gulf News Banking, the global sukuk market has doubled in the last three years – with no signs of slowing down at this point.