2nd Public Lender to set up Islamic Bank

The government sent Parliament a draft for a change in laws regulating the Turkish banking sector on Monday. The anticipated changes would involve plans to allow public bank Vakıfbank to set up the country's second anticipated Islamic public lender, after Ziraat Bankası. Ziraat received regulatory approval from the Banking Regulation and Supervision Agency (BDDK) last week to establish an Islamic bank. The moves are part of government efforts to develop the Islamic banking sector at home.

Ziraat, the country's largest state-run bank and its second-largest in terms of assets, will be allowed to set up a standalone Islamic unit with $300 million in capital, the regulator said late on Wednesday. Meanwhile, Turkish media speculated on Monday that, Emlak Bank, a lender which was transferred to Ziraat Bankası during Turkey's 2001 domestic financial crisis, would be reactivated as part of the Islamic bank plans. Emlak Bank, established in 1926, failed in 2001 and has since been in a liquidation process, with its operations being carried out under Ziraat.

There are currently four Islamic banks operating in Turkey, which hold a combined 5 percent share of total banking assets: Albaraka Türk, Bank Asya, Türkiye Finans and Kuveyt Türk, a unit of Kuwait Finance House.

Islamic finance has developed slowly in Turkey, the world's eighth most populous Muslim nation, partly because of political sensitivities and the secular nature of its laws. This changed in 2012, when the Turkish government issued its debut $1.5 billion Islamic bond and kick-started regulatory moves to allow wider use of Islamic finance contracts. The government has since issued dollar and lira-denominated Islamic bonds and is finalizing plans for another deal.

Source: http://www.todayszaman.com/anasayfa_2nd-public-lender-to-set-up-islamic-bank_362108.html

Kenya's KCB to offer Islamic banking in all its branches

Kenya's KCB Bank, the country's largest lender by assets, plans to offer Islamic banking products through its entire branch network, accelerating the expansion of sharia-compliant banking in east Africa's biggest economy.

The move comes after Kenya's Capital Market Authority proposed a separate regulatory framework for Islamic finance, part of a broader strategy designed to boost the country's capital markets.

KCB has received all necessary approvals to launch Islamic banking across its 182 branches in the country, chief executive Joshua Oigara said in a statement. "In the long term, the product will...promote development in the marginalized areas of our country," Oigara said.

The lender will initially roll out Islamic banking services through seven branch centers, beginning from next month.

KCB joins Standard Chartered in offering Islamic banking services in Kenya, after the British lender launched its "Saadiq" brand in March.

Islamic finance, which follows religious principles such as bans on interest payments, accounts for roughly 2 percent of total banking business in Kenya, where Muslims make up about 15 percent of the population of 40 million.

There are currently two full-fledged Islamic banks in Kenya - Gulf African Bank and First Community Bank (FCB) - as well as Islamic banking services at several conventional lenders.

KCB, which operates across east Africa from Burundi to South Sudan, already offers Islamic banking services in Tanzania.

Islamic finance is also being developed by several other sub-Saharan countries in Africa such as Nigeria and Djibouti.

In June, Kenya's finance minister said the government would consider issuing Islamic bonds, or sukuk, after a successful debut $2 billion Eurobond.