IslamicFinance.de

A delegation from the Central Bank of Turkey will soon meet their Iranian counterparts in Tehran to remove hurdles in the way of bilateral banking relations. Particular difficulties include Iranian citizens' bank accounts in the Turkish Halkbank. The banking ties were overshadowed by the detention of a senior Halkbank official in the US in March for allegedly violating Iran sanctions. Mehmet Hakan Atilla was accused of conspiring with Reza Zarrab, an Iranian-Turkish gold trader, to channel hundreds of millions of dollars through the US financial system on behalf of Iranian companies. Turkish Minister of Economy Nihat Zeybekci is also scheduled to visit Iran on June 21 to negotiate a preferential trade agreement between the two sides.

Turkish state-run lender Halkbank has decided to establish an Islamic finance unit, in line with a government effort to develop the sector and tap a pool of investors in the Gulf and southeast Asia. The bank said its management would seek regulatory approval for the Islamic unit, known locally as a participation bank, but gave no further details on the plans. The Halkbank board has mandated the general management for the establishment of a participation bank, and to carry out the required processes for legal and administrative permissions, it said in a stock exchange filing. Since 2012, the Turkish government has pushed the development of Islamic finance by regulatory moves and issuing sukuk.