Deputy Prime Minister Mehmet Simsek, last May 11 announced that Turkey will host the new bank Islamic, later this year.
“We are in contact with the Islamic Bank for Development to establish a bank in Turkey. Indonesia also has a similar project”, Simsek said, adding that Indonesia, Turkey and the Islamic Bank for Development, during a visit to Washington last April decided to form a special commission to evaluate the issue.
He further stated: “Turkey will be the venue for the bank that will serve the entire region, and will have a specialized and territorial cut”.
According to the project, the bank will be established in Istanbul. The turkish government has long aimed to make the city a financial center and Simsek stressed that Islamic finance is paramount to achieve this intention. It operates in complete absence of taxes, following what is preached Islam. “The Islamic finance has tremendous potential for growth, but we need to stimulate it”, the Deputy Prime Minister said, calling on Islamic banks to offer more services to their clients.
The Treasury and the Islamic Bank for Development will partner bank. Currently there are six Islamic banks operating in Turkey: Albaraka Türk, Bank Asya, Kuveyt Türk, Türkiye Finans, Ziraat and Vakif. These last two have launched only recently also the Islamic branches, two other Short-term bank should become operational in the Islamic financial sector.
The turkish territory, are at least 16,000 employees in the sector and 1,100 branches. Islamic banks account for 5% of total turkish banking system, the government will work to ensure they reach 15% by 2023.
Cevdet Yilmaz, Minister of Development, said the Islamic finance should expand at a very rapid growth rate. At a meeting on sustainable development Yilmaz said that the size capital of Islamic finance in Turkey has reached 40 billions of dollars. Globally it totaled 3,000 billion dollars and is expected to reach 4 trillion by 2020.