Islamic Finance

Turkey’s religious affairs directorate to start paying salaries of more than 100,000 officials through Islamic banks - media

Turkey’s Religious Affairs Directorate, Diyanet, will start paying the salaries of its officials through Islamic banks, state-owned news agency Anadolu reported on Monday (Nov 25).

Local administrative offices of the Diyanet will decide which participation banks, as Islamic banks are called in Turkey, they will use to process the salaries, according to Anadolu.

The Diyanet is an official state institution and the salaries of its employees are paid by the government. In 2018 it had 107,206 employees, according to data from its website. 

It reported on its website expenditure on personnel in 2018 of 3,549,812,369.29 Turkish liras ($616.23 million) out of total expenditure of 4,945,900,759 liras ($858.58 million).

Diyanet's work includes administration of all mosques, pilgrimage affairs, and religious publications.

The move to use only Islamic banks to process Diyanet employee salaries will be a boost for Turkey’s Shariah-compliant financial industry.

The government has set a goal to increase the market share of Islamic banking in the country to 15% by 2025.

The country’s six participation banks held 257,211 million Turkish liras ($44.66 billion) in assets in September, accounting for 6% of the banking sector, according to data from the Participation Banks Association of Turkey.

The state news agency reported earlier this month that participation banking was on the Turkish President’s Annual Program released November 4.  

It said the program encouraged Shariah-compliant corporate loans and sukuk.

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