ANKARA
Turkey's third-largest state bank Vakıfbank has received regulatory approval Tuesday from the Banking Regulation and Supervision Agency to establish an Islamic banking division.
Vakıfbank will be allowed to set up a stand-alone Islamic unit capitalized at $300 million, the bank said in a statement published Tuesday.
After the approval, the bank has nine months to establish its banking unit according to Turkish law.
Turkey has 6 non-state Islamic banks including Albaraka Turk, Bank Asya, Turkiye Finans, Kuveyt Turk, state-owned Ziraat Bank and Halkbank which received regulatory approval to establish an Islamic unit in January 2015.
Shareholders of the new Islamic bank will include Turkish Directorate General of Foundations, Bayezid Han-ı Sani (II. Bayezid) Vakfı, Mahmud Han-ı Evvel bin Mustafa Han (I. Mahmud) Vakfı, Mahmud Han-ı Sani bin Abdülhamid Han-ı Evvel (II. Mahmut) Vakfı ve Murad Paşa bin Abdusselam (Murat Paşa) Foundation.
Islamic banking adheres to the principle that money should not simply be lent, but rather invested in a productive process.
