Kuwaiti customers stand at the service counter at a Kuwait Finance House branch inside the Avenues Mall, the largest shopping centre in Kuwait on November 19, 2014.AFP PHOTO/ YASSER AL-ZAYYAT
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When a Muslim cleric told Ahmad Salim that Shariah law forbade paying interest, he returned his days-old loan to the bank and turned to the fast-growing industry of Islamic finance."A cleric told me it is not permissible under Islam to take loans from a non-Islamic bank because they charge interest," the white-collar worker said.A few days later, he arranged for a loan from an Islamic bank after paying a $700 service charge.About 80 percent of these assets are now in banks, 15 percent in Islamic bonds called sukuk, 4 percent in investment funds and 1 percent in Islamic insurance known as Takaful.Iran accounts for about 40 percent of Islamic banking assets, Saudi Arabia 12 percent, and Malaysia 10 percent.Proponents argue that Islamic banks outperformed their conventional counterparts during the 2008 global financial crisis.
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