DUBAI: Iraq’s Ashur International Bank wants to open Islamic banking services in Iraq amid growing interest in sharia-compliant financing, the investment bank’s chairman said on Tuesday.
Speaking on the sidelines of a conference in Dubai, Chairman Wadea Al Handal told Reuters that Ashur Bank is waiting for approval from Iraq’s Central Bank to offer Islamic banking services and that it submitted an application for the development six months ago.
"There is certainly clear interest in the Islamic market in Iraq but it is still a new idea for many," he said. "It’s an education process… we didn’t really have much Islamic banking before."
He said the banking environment is dominated by state-owned banks with private banking largely relegated to deposit services and some personal lending.
Al Handal said the bank, which is primarily an investment bank, would look to offer more lending services and retail products on a sharia-compliant basis in order to tap growing interest in the market.
Seven of the country’s 42 banks are Islamic, according to Iraq’s central bank website.
Regional players from the Gulf have been looking to expand Islamic operations in Iraq.
Abu Dhabi Islamic Bank plans to open a branch in Baghdad in June, becoming the first bank from the United Arab Emirates with an Iraqi presence.
Al Handal said that for Islamic finance to thrive in Iraq, regulatory rules would need to be changed to address taxation concerns and to bridge the gap in regulation between conventional and Islamic banking.
The Central Bank, last year, said it was looking into modifying the laws in order to help Islamic banks grow.