The Central Bank of Kuwait (CBK) has issued a provisional licence for establishing a new Islamic bank in the emirate, CBK governor Sheikh Salem Abdul Aziz al-Sabah said Sunday.
"We have issued a provisional licence to the Kuwait Investment Authority (KIA) to establish an Islamic bank. KIA will own a 24 percent stake and the rest will be sold in a public offering," he said.
"We expect the offering to start within the next two months," Sheikh Salem told reporters after opening a two-day conference on money laundering.
The bank's capital will be more than 75 million dinars (250 million dollars).
KIA is the state agency managing Kuwait's financial surplus mainly in foreign assets but also has holdings in the domestic market.
CBK has also allowed an existing bank, Kuwait Real Estate Bank (KRE), to operate in accordance with sharia, or Islamic law, but KRE is still in the process of changing its status. Kuwait Finance House (KFH) is the only bank that has been operating in the oil-rich emirate for the last 26 years on Islamic principles.
The measure to allow two more Islamic banks follows the passing of legislation last year extending the central bank's supervision to Islamic banks.
Under the legislation, ordinary banks are not allowed to have special units operating on Islamic principles.
KFH is one of the largest Islamic banks in the region with total assets reaching 8.5 billion dollars and has 27 branches in Kuwait.
Kuwait's parliament last week passed a law allowing foreign banks to operate in the emirate, but rejected a proposal put forward by Islamist MPs requiring such banks to operate on Islamic principles.
Sheikh Salem said the CBK will work out the bylaws of the foreign banks legislation once it is published in the official gazette.
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