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Turkey plans to establish a state-run Islamic bank

Turkey plans to establish a state-run Islamic bank

The Turkish government plans to establish three state-owned Islamic banks as a subsidiary of the current state-run conventional banks by the end of 2015, Ali Babacan, deputy prime minister responsible for the economy said Anadolu Agency reported.

Babacan said that they want three state-owned banks — Ziraat Bank, Halkbank and Vakifbank — to each have an Islamic, interest-free bank under their roof.

“We made our decision politically on the issue and wish the public sector to take part in the Islamic banking sector,” Babacan said.

He noted Ziraat Bank has already started negotiations with the private Islamic-style “participation” bank. He stressed his government wishes success in the negotiations.

“I believe at the end of 2015, three state-owned Islamic banks will be established,” Babacan said.

Ziraat is one of the three state-owned banks which plan to open up a participating subsidiary to offer interest-free financial services.

In the last four months, Bank Asya has been in exclusive talks with Qatar Islamic Bank over transfer of some the Turkish lender’s shares to the Doha-based bank.