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Swiss banks weigh impact of mosque minarets row

Dec. 31, 2009 at 5:20 PM   |   Comments

ZURICH, Switzerland, Dec. 31 (UPI) -- Swiss banks are worried the row over mosque minarets, banned in a referendum despite grave reservations from sections of the Swiss public, will lead to Muslim deposit holders taking their business to Turkey and even Germany, Swiss and Turkish media reported.

Alarm bells were raised when Turkey's minister in charge of accession talks with the European Union, Egeman Bagis, urged Muslims to "empty" their bank accounts in Switzerland. Bagis said Turkish banks would welcome new account holders who were angered over the minarets ban.

More worryingly for some Swiss bankers, German regulatory authorities have indicated they would welcome introduction of Islamic banking in the country, in line with trends in other European countries, particularly Britain and France, that have large Muslim populations.

Analysts said the German view on attracting Muslim account holders who want banking according to the Shariah law was also motivated by the rapid growth of Shariah-compliant Islamic banking in the Gulf, where billions of dollars have moved out of conventional banks into Islamic banks. Shariah-compliant banking prohibits charging of interest but permits profit on banked amounts.

German banks have begun introducing new Shariah-compliant financial products to attract large sums from depositors in the Gulf who want to diversify their investments. A series of recent seminars in Germany and Switzerland highlighted opportunities available to banks to attract depositors who want to do business in accordance with Shariah Islamic law.

"Will Muslims snub Swiss banks in minaret row?" asked the agora-dialogue.com Web site. "Swiss banks could pay a price for the country's decision to ban new mosque minarets, with calls for Muslims to empty their accounts in protest."

No figures are available on how much money is involved in explicitly Muslim-held deposits in Swiss banks, but financial sources cited in the Turkish media said the amounts could run into tens of billions of dollars.

The ordinary current accounts held by Muslim Swiss citizens or residents hold smaller amounts but potentially can make an impact if withdrawals are implemented en masse.

Swiss banks hope several factors will discourage such a protest move, including the fact that many account holders are used to the convenience of having local accounts or have their salaries and wages paid into those accounts in Swiss francs.

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