In recent years, the UK has stepped up its game in Islamic finance. In 2014, for example, it became the first country outside the Islamic world to issue a sovereign sukuk, the Islamic equivalent of a bond.
With such significant developments taking place here in the UK, I was very much looking forward to a trip to Turkey where I discussed how we can build upon this further.
A major focus of my trip was the Islamic Finance Summit, hosted at the British Consulate-General in Istanbul. Playing host to more than 100 Turkish, British and other international bankers, business people and academics, it was a good opportunity to see close up how the rise in prominence of Sharia-compliant finance in the UK had helped strengthen bonds with Turkey.
Built upon Islamic law, Sharia-compliant investment firms are prohibited from investing in businesses that trade, for example, in the sale of alcohol, pork products and gambling. The other significant difference lies in the way in which interest is paid and owed. Instead of charging or receiving interest, a bank and its customer will share the risk of an investment on agreed terms, dividing any profits between them. The collection and payment of interest by…