Turkey: special finance institutions add to foreign investment

In an effort to draw oil money into Turkey, two Islamic banks have been founded. The banks are Saudi-funded and are called Faisal Finansman and Al Baraka Turkish Finance House. Both institutions are as of yet located solely in Istanbul. The official status of the two banks is that they are Special Finance Institutions (SFI's) and not subject to certain portions of the national banking laws. Faisal Finansman has financed projects valuing about $9 million already. Both banks have chosen not to undertake trading on their own accounts yet; meanwhile they have both been successful in providing better rates of return than those rates offered by commercial banks. The banks are legally bound to use at least 25% of deposits in profit and loss accounts for export finance.