Watchdog OKs bank to launch Islamic unit

ANKARA

Turkey’s third-largest state-run bank Vakıfbank received regulatory approval yesterday from banking watchdog BDDK to establish an Islamic banking division, the Official Gazette has announced.

The bank will need to own a capital of $300 million.

With the approval, the bank has nine months to establish its banking unit according to Turkish law.

Turkey has four non-state Islamic banks including Albaraka Türk, Bank Asya, Turkiye Finans and Kuveyt Türk. State-run Ziraat Bank and Halkbank also received regulatory approval to establish an Islamic unit a couple of months ago.  Islamic banks are also called participation banks in Turkey, as they do not collect interest, but share the profit or loss of their borrowers.