The Islamic lending arm of Turkey’s state-run Ziraat Bank has applied to sell 1.5 billion lira ($501.9 million) worth of Islamic bonds, or sukuk, according to Turkey’s Capital Markets Board.

The sale would be the first by a state-run Islamic bank, known in Turkey as participation banks, and follows a wider government push to develop the sector in the world’s eighth most populous Muslim nation.

No tenor or details of underlying assets were given for the deal, which will be sold to qualified investors.

Islamic lender Kuveyt Turk also applied for 1.85 billion lira worth of sukuk.

Islamic finance has developed slowly in Turkey, partly because of political sensitivities and the secular nature of its laws, but state-run lenders are poised to change this.

Ziraat Participation Bank started operations in May 2015, with 675 million lira in paid-up capital and plans to have 170 branches and 2,200 staff by the end of 2018.

On Friday, state-run Vakifbank launched its own Islamic unit, with President Tayyip Erdogan pledging support for the sector and calling for its share of overall banking to be raised to 25 percent.

There are now six Islamic banks operating in Turkey, which hold a combined 5 percent share of total banking assets.

This includes Bank Asya, which was seized by the government last year, as the lender was caught in a feud between Erdogan and U.S.-based cleric Fethullah Gulen, whose followers founded the bank.

Last week, chairman of the deposit insurance fund that controls Bank Asya, said it would either be sold by the end of May or liquidated if a buyer was not found.

Source: Reuters