by Dominic Dudley
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Sometime later this year Qatar International Islamic Bank is hoping to gain a licence in Morocco for a new bank that it is setting up in a joint venture with the local CIH Bank. It is just one small part in a wider story of Islamic banks gaining footholds and expanding. Among other recent converts to the cause is Oman, which began to issue Shariah-compliant banking licences in 2012.
It is not just a trend in Muslim-majority countries. In Europe, the Bank of England issued a consultation paper in February on the feasibility of establishing a Shariah-compliant liquidity facility. Such developments create the impression that Islamic banking is starting to make headway in the global banking system. However, the facts and a lot of industry opinion suggest otherwise.
Of the 1,143 Islamic finance institutions now in existence, the vast majority are in just a few regions. According to ICD Thomson Reuters, 627 of them are in the Middle East and North Africa and 241 are in southeast Asia, leaving just 275 institutions to cover the rest of the world.