Kuwait saturated with Islamic banks, cenbank head says

There are five Kuwaiti Islamic lenders registered with the central bank.
KUWAIT BANKS: Saudi Arabias Al-Rajhi Bank, one of the biggest Islamic lenders in the Gulf, also operates in Kuwait.(Getty Images)
By Diana Elias
Tue 21 Sep 2010 11:26 AM

Kuwait's central bank governor said the Gulf Arab state is saturated with Islamic banks, according to remarks published in a newspaper on Tuesday.

Sheikh Salem Abdul Aziz Al Sabah told Arabic language daily Al Seyassah that there were five Kuwaiti Islamic lenders registered with the central bank and five conventional banks.

Saudi Arabia's Al-Rajhi Bank, one of the biggest Islamic lenders in the Gulf, also operates in Kuwait.

"I believe that with this the Kuwaiti market has reached saturation point for Islamic banks at this stage," the governor told the newspaper.

The governor did not elaborate. His office could not be immediately reached for comment.

Islamic banking is one of the world's fastest growing financial sectors, and it has attracted more attention in the aftermath of the global financial crisis as investors are increasingly looking for alternative, ethical ways of investing.

Islamic law, or sharia, bans charging interest and prohibits investment in sectors such as alcohol and gambling.

Independent analyst Ali al-Nimesh said while the current view of saturation may be accurate, demand could pick up in coming years.

"In the long term, we cannot be certain that it has been saturated." (Reuters)

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