Turkey’s largest Islamic banking institution opened its doors to the German public on Wednesday, becoming the first bank in Germany to offer a wide range of services based on Islamic rulings.
In 2010, the bank, which is mainly owned by Kuwaiti investors, first opened a branch in the south-western city of Mannheim. After seeking regulatory approval for a full banking licence in 2012 the bank has now become fully functional.
Islamic banking operates under a system based on the principles of Islamic law. The two key principles behind the system are the sharing of profit and losses and a strict prohibition on the collection and payment of interest.
Throughout Europe this new system of banking has already gained some success. The United Kingdom currently has five Islamic banks based in it and is the first non-Muslim country to issue sukuk – an Islamic bond equivalent similar to a participation certificate.
Currently there are close to four million Muslims living in Germany.
Kemal Ozan, head of Kuveyt Turk stated that the demand for this banking sector is now on the rise.
"Our market research has shown, that 21 percent of Muslims in this country would see an Islamic bank as their natural household bank," he said. Past analyses of the German market for Islamic banking indicate that it has a potential volume of 1.6 billion euros (1.73 billion dollars).