Islamic finance assets may reach $3.4T in 2024: Expert

The volume of Islamic banks is estimated to reach $2.2 trillion globally in 2024, as the total assets of Islamic finance are predicted to reach $3.4 trillion, a Turkish economist said Thursday.

Necdet Şensoy of the Istanbul Commerce University told Anadolu Agency that at $2.5 trillion, Islamic banking assets constituted some 70% of all Islamic finance assets as of 2018.

There are a total of 520 Islamic banks in 72 countries, with 301 being full-fledged Islamic banks and rest Islamic window banks in conventional lenders, added Şensoy, a former council member of Turkey's Central Bank.

Islamic window-banking is a type of operating structure to offer Islamic finance products and services through the branches of conventional banks.

Şensoy explained that as of 2018, Islamic banks' share in banking sector assets was 6% globally, with Islamic finance assets amounting to $51 billion in Turkey, $521 billion in Malaysia, $486 billion in Indonesia and $125 billion in Qatar.

In Turkey, the Islamic or interest-free banking system is known as participation banking.

"Turkey's Istanbul Finance Center can attract Islamic finance products [such as Sukuk and funds] by establishing legal and financial infrastructure," Şensoy said.

The Istanbul Finance Center project, expected to be completed as of early 2022, will serve as a global hub for financial systems and non-banking financial methods, including Islamic finance.