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Turkiye eyes to become leader in Islamic finance, says official

Turkish President Recep Tayyip Erdogan in Ankara, on October 01, 2022 [Aytaç Ünal/Anadolu Agency]
Turkish President Recep Tayyip Erdogan in Ankara, on October 01, 2022 [Aytaç Ünal/Anadolu Agency]

Turkiye aims to position itself as the leading country in Islamic finance, a senior finance official said on Tuesday, Anadolu News Agency reports.

"Unlike many countries claiming to be an Islamic financial centre in the world, Turkiye has very important advantages based on its historical, cultural, geopolitical and economic background," Goksel Asan, Head of the presidency's Finance Office, told a publicity event for the participation finance strategy document in Istanbul.

He said they have been working to achieve this goal.

His remarks came a day after President Recep Tayyip Erdogan vowed to take further steps to promote development of participation finance.

Erdogan, on Monday, said the participation finance system falls short of its potential in Turkiye, where people's religious sensitivities are high.

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Asan said they see the participation finance system not only as a structure putting savings to good use in line with religious sensitivities, but also as a driving force that has potential to play an important role in the country's development and financial independence.

The participation finance strategy document, he said, includes concrete steps to realise the strategic transformation that will enable the participation finance to reach the place it deserves in 2022-2025, which he described as "the period of holistic transformation."

While the document was being prepared, Istanbul Financial Centre was taken into account along with macro-economic targets for strong, sustainable and inclusive growth, and the UN's sustainable development goals.

"Thus, we aim to operate in accordance with the spirit of participation finance, which is one of the two pillars of the Istanbul Financial Centre project," he underlined.

The Turkish economy model will become more effective with the implementation of the action items reflecting the strategic goals of the document, Asan said.

In 2020, participation banks made progress toward creating an investment bank with a mandate to invest in Islamic assets, and the government set up a new department within the presidency's Finance Office to promote Islamic finance.

In 2021, global rating agency, Moody's, said Turkiye's Islamic banking assets, also known as participation banking assets, will at least double over the next five years, helped by supportive regulations and an expanding distribution network.

This rapid growth is being backed by Turkish government policies and regulations, and the expansion of participation banking networks.

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