Islamic banks around the world: a regional directory

How a full-fledged Islamic bank differs from a window

A full-fledged Islamic bank operates entirely under Sharia, from its balance sheet to its treasury. An Islamic window is a unit inside a conventional bank, ring-fenced with separate funds and its own Sharia committee, common in Malaysia, Pakistan, Indonesia and Oman.

Both models are regulated as banks. The difference for customers is mainly governance and perception: a window shares capital, systems and staff with the conventional parent, while a stand-alone bank has no interest-bearing business at all.

Where the money comes from and where it goes

Deposits are taken on qard (current accounts guaranteed by the bank), mudaraba (profit-sharing investment accounts) or wakala (agency accounts with an expected profit). Financing is extended through murabaha, ijara, diminishing musharaka, istisna and salam, depending on the asset and the client.

Why Sharia governance matters

Every Islamic bank must appoint a Sharia supervisory board that approves products and reviews transactions. AAOIFI governance standards and IFSB guidance require independence, internal Sharia audit and annual reporting, so customers can read a published Sharia opinion alongside the financial statements.

How the legal framework varies

Some countries have dedicated laws, such as Malaysia’s Islamic Financial Services Act 2013 or Pakistan’s State Bank regulations. Others, like the United Kingdom, regulate Islamic banks under ordinary banking law and adjusted tax rules for alternative finance, so deposits enjoy the same protection scheme.

Gulf Cooperation Council: the largest pools of assets

Saudi Arabia hosts Al Rajhi Bank, Alinma Bank, Bank AlBilad and Bank AlJazira. Kuwait has Kuwait Finance House, which absorbed Ahli United Bank, and Boubyan Bank. The UAE counts Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates Islamic and Ajman Bank.

Qatar is served by Qatar Islamic Bank, Dukhan Bank and Masraf Al Rayan, while Bahrain hosts Kuwait Finance House Bahrain and Al Baraka. Oman licensed Bank Nizwa as its first full-fledged Islamic bank and lets conventional banks run separately capitalised Islamic windows.

Southeast and South Asia

Malaysia has the most diversified system, with Maybank Islamic, CIMB Islamic, Bank Islam Malaysia, Bank Muamalat and RHB Islamic. Indonesia merged three state-owned Sharia banks into Bank Syariah Indonesia in 2021. Pakistan’s largest Islamic lender is Meezan Bank, while Bangladesh hosts Islami Bank Bangladesh.

Europe, North America and Africa

The UK has Al Rayan Bank, Gatehouse Bank, BLME, QIB (UK) and Kuwait Finance House’s UK subsidiary. Turkey uses participation banks such as Kuveyt Türk. North America has no licensed Islamic bank; Guidance Residential, UIF and Devon Bank offer specific products. Africa includes Jaiz Bank in Nigeria and Islamic banks in Sudan.

Choosing and opening an account step by step

Opening an account with an Islamic bank follows standard know-your-customer rules. The steps below apply whether you approach a Gulf bank, a Malaysian institution or a UK Islamic bank as a resident.

1. Confirm the bank is licensed by the national regulator and check its deposit-protection scheme.
2. Read its latest Sharia supervisory board report and the products it certifies.
3. Compare current, savings and investment accounts, including the expected profit rate basis.
4. Prepare identity, proof of address and, for non-residents, tax residency forms.
5. Apply online or in a branch and complete the bank’s source-of-funds questions.
6. Fund the account and check how profit is distributed and when it is credited.

Typical costs and documents

Fees are usually comparable to those of conventional banks, while the difference lies in how returns are generated. The table summarises what most Islamic banks ask for and charge, without quoting rates that vary weekly.

Errors that slow down an application

Applications are usually delayed by compliance questions rather than religious criteria, so preparation matters more than the choice of contract.

• Applying to a bank that does not accept non-residents in your category.
• Confusing an investment account with a guaranteed deposit when risk-sharing applies.
• Assuming every product of an Islamic window is Sharia-certified: check each one.
• Leaving gaps in source-of-funds evidence for large transfers.
• Ignoring local deposit-protection limits when holding large balances.

Comparing size and reach

Assets are concentrated: Saudi Arabia, Malaysia, the UAE, Kuwait and Qatar hold most global Islamic banking assets. The IFSB publishes an annual stability report with country shares, which is the most reliable starting point for comparing markets and institutions.

Checking a bank’s Sharia credentials

Look for the names of Sharia board members, their fatwas on key products and an annual Sharia audit statement. Banks following AAOIFI standards usually say so in their financial statements, which helps when comparing banks across jurisdictions.

Questions people ask about Islamic banks

The following answers cover the points that most often come up when readers compare Islamic banks across regions and decide where to open an account or seek financing.

Are deposits in Islamic banks protected?

Current accounts held as qard are generally covered by national deposit insurance where it exists, as with the FSCS for UK banks. Investment accounts based on mudaraba share risk, so protection depends on local law and the account terms.

Can non-Muslims bank with an Islamic bank?

Yes. Islamic banks serve any customer who meets know-your-customer requirements. In Malaysia and the UK a large share of customers are not Muslim and choose these banks for their fixed-price financing or ethical investment restrictions.

Is there an Islamic bank in the United States?

No federally chartered full-fledged Islamic bank operates in the US. Residents use providers such as Guidance Residential, UIF and Devon Bank for specific home, car or commercial products, all operating within ordinary US lending regulations.

Which is the largest Islamic bank?

By total assets, Al Rajhi Bank in Saudi Arabia and Kuwait Finance House are usually ranked at the top, followed by Dubai Islamic Bank, Qatar Islamic Bank and Maybank Islamic, depending on the reporting year.