Iran sharply raises stake in Islamic body
The International Islamic Trade Finance Corp (ITFC) has approved raising Iran’s stake in the financial entity, making the country the third largest shareholder, its annual report says.
Iran is getting 8,500 new shares worth $85 million under the new arrangement, sharply up from just $1.92 million for the country at the end of 2013, the report said.
ITFC has financed $594 million worth of projects in Iran since its establishment in 2008. The financial entity, promoting Sharia-compliant interest- or riba-free transactions, is growing in size and becoming a force to be reckoned with.
In 2014, ITFC oversaw transactions worth $5.2 billion mostly in the energy sector, up from $3.4 billion in 2013.
Currently, as many as 31 countries with 56 shareholders are members of the International Islamic Trade Finance Corp.
ITFC, headquartered in the Saudi city of Jeddah, promotes trade among Muslim countries. On its website, IFTC says its award-winning innovative Shariah-compliant trade finance has proven its effectiveness in providing solutions to clients' needs during difficult economic environments.
The Islamic Development Bank is currently the biggest shareholder in the ITFC, worth $266 million, followed by Saudi Arabia at $120 million.
Iran is expanding its trade links with independent financial institutions amid US-led sanctions.
Meanwhile, Islamic finance is expanding around the world. Last year, Britain became the first country outside the Muslim world to issue an Islamic bond, known as Sukuk.
British government officials have said London was bidding to become the center for the Islamic finance industry.
Russian financial institutions have also stepped up efforts to tap Islamic finance amid US and European sanctions on the country over the Ukraine crisis.
The interest in Islamic transactions comes amid waning trust in leading financial institutions in Europe and the US which are grappling with a series of scandals.
HSBC, Barclays, RBS, JPMorgan, Bank of America, UBS and Citigroup are accused of using a series of deceptive means to manipulate the US dollar and the euro.
Trust is now at a tipping point as investors consider changing their investment to other trading destinations.
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