Islamic banks aim for the mainstream

The rapidly developing Islamic banking sector was stunned by the recent revelation that one of its oldest and most respected commercial institutions, Dubai Islamic Bank, had run into what was described officially as 'financial difficulties'. The number of entities in the sector is growing rapidly. There are now more than 200 Islamic banks. In addition, some multinational financial institutions, including Citibank and Arab Banking Corporation, are setting up subsidiaries or specialist divisions. Some theorize that Islamic finance may even have a role to play in underpinning the stability of the international economy. They argue that Islamic finance, such as secured debts in the form of leasing, could have reduced the impact of the south-east Asian slump or prevented it from happening at all. But taking on world markets is a long-term ambition. Before then Islamic institutions have to define uniform and consistent accounting and auditing standards and ensure proper regulation.