Bank to set up Islamic finance company

Standard Chartered Bank is planning to set up an Islamic finance company.

Several banks have announced their intention to establish their Islamic finance arm in the form of a finance company, which can perform all activities of a bank except accepting deposits from individuals.

Ray Ferguson, CEO of Standard Chartered, said: "Although a formal application has not been made, the bank is seriously studying the scope of an Islamic finance arm. Ferguson also said the bank's office within the Dubai International Financial Centre will be operational soon."

He also said that the bank has already entered the mortgage finance market.

Experts said with the land law yet to be in place, banks seek to cover the risk of lending against freehold properties by signing agreements with the developers.