Why don’t major Western banks open branches in Muslim countries?

Question

jshm2 · Accepted Answer

Because they are not allowed to charge interest, like Western banks do.

jamesgoldman · Accepted Answer

Because they can't charge interest

OlderAndWiser · Answer

Perhaps they are afraid of radicals nationalizing such institutions.

OneViewpoint · Answer

Ummmm... Ai said it more succinctly than I could.

"Islam strictly prohibits loan interest, known as riba, viewing it as exploitative and unjust. Both paying and receiving interest are forbidden under Sharia law, regardless of the interest rate. Muslims instead use risk-sharing and profit-and-loss models for financial transactions."

Definition: Riba means any predetermined or guaranteed extra return on a loan that is not tied to real economic effort or risk.Prohibition: The Quran and Hadith strongly condemn it, considering it a major sin because it increases wealth without productive work and causes social inequality. Included Items: Conventional bank loans, mortgages, credit card interest, and savings account interest are generally classified as prohibited (haram)

"The laws against riba originated in 7th-century Arabia to dismantle an exploitative pre-Islamic tribal credit system known as Riba al-Jahiliyyah. In this system, lenders trapped poor debtors, farmers, and traders in compounding debt cycles that frequently resulted in slavery or the loss of all property."

Look at it as usury laws taken to the logical endpoint. Apparently Arabs had a run in with money lenders putting the screws to them around the time Mohammed was surfing the sand dunes. This was the social reform that ended that predatory practice. I can't say I disagree with the Quran in this instance. Well done Islam!

If Western banks want to operate in Muslim countries, they are gonna need to come up with a risk sharing of profits and losses model that will fit the Islamic ban on Riba.

2

Chazmatazz269 · Answer

They often do. Countries in which Sharia law is the law of the land often have two banking systems because Muslim banking and finance is managed differently than western banking and finance. There is a skool of thought that suggests the expansion of Islam into western countries is the result of banks’ demands to capitalize on that market. It’s a solid side bet.

AviatorTom · Answer

Banking rules and regulations vary from country to country. Most banks only do business where the rules and regulations are consistent. Muslim countries have different rules, as well as different legal systems, which increases a bank's effort and risk if it wants to do business there.

Stevepro68 · Answer

What is a Muslim country just curious how you define that? By percentage population Indonesian is severely Muslim at 87% self identified as Muslim. Yet the US world bank created by the US for world stability operates in Indonesia for 60 years. Saudi Arabia since 1975. Specific banks are like restaurant franchises most are locally owned to follow the banking laws of those specific countries. So not sure where you are going with this question.

FreyaRed · Answer

Islamists think every bank system except their Islamic one is controlled by "chosen ones" and completely haram. They sell credits without interests rates but it's just called different. At the end you have pay back more than you took as loan.

Masie · Answer

Just going to go out on a limb and say they don't want the risk. By that I mean that those countries that are Muslim are going to have people that are skeptical of western banks.

To set up systems to hold money and issue loans and credit probably is too expensive versus the return they would or could get trying to compete with banks run by their own country.

Purely a guess.

Zack-Bann · Answer

I work for a major western bank at the moment and let me tell you: it’s a lot of work to ensure the bank isn’t being used to launder money or fund terrorism.
It’s not at all a progressive institution.

So to open a branch in the hotbed of terrorism would make it so much easier for these organizations to funnel money.

Terrorism in the name of Islam, hurts muslims first and foremost.

MikeTheBartender · Answer

It's pretty hard to find any bank out of its own country. I have accounts with Chase and Wells Fargo in the United States, I have seen Chase Banks internationally, but these are deceptive, they're not normal banks, they are for only high paying clients, construction projects etc.

Honestly, I can't think of a time that I've seen a bank in the United States outside of the United States, I don't even know about Canada.

YourExLover69 · Answer

They actually do—but usually not in the form of a large retail branch network, and the reasons have much more to do with economics and regulation than Islam itself.

Western banks aren't generally avoiding Muslim countries; they're avoiding low-return retail branch expansion wherever local banks already have the market.

ericJackson · Answer

major Western banks maintain a massive presence in Muslim-majority nations , particularly in financial hubs across the Middle East like Dubai, Riyadh, Abu Dhabi, and Doha and Southeast Asia like Malaysia and Indonesia

Lliam · Answer

Usury is unlawful in Islam?

loveslongnails · Answer

To put it simply, regardless of Muslim law, and even if interest was allowed, "the juice ain't worth the squeeze" to your typical 1st world banks. Too much risk of regime change and nationalization as well.

Sevenpointfive · Answer

i thought the western banks were owned by a certain middle eastern group. and that group doesn't get along with the muslims.

turk55 · Answer

@Kelly Major global banks such as JPMorgan Chase, HSBC, Citibank, Société Générale, and BNP Paribas have branches in Türkiye.

lightbulb27 · Answer

They have too much money to insure by fdic. in allah we trust…

RavVid · Answer

They would have to change their business model. Charging interest is usury in Islam.

slatyb · Answer

Most like banking regulations. US banks do not have branches in Canada or in Europe.

RareBreedOfMan · Answer

Maybe they fear such thing would cause banks to be robbed?

FunkyMonkee · Answer

Maybe they don't have any place to keep all the goats and camels.

exitseven · Answer

I think that there is some kind of issue the US has with the Bank of Iran

canamlusciouslad73 · Answer

Interest-free Muslim banking, though I don't know if that is still a banking requirement in the Islamic world.

CaptainSmartass · Answer

It's something to do with loans, I think. Simples...

fishbone77 · Answer

Because instead of giving you a toaster for opening an account they'd want an 11 year old boy.

krin_m · Answer

There are several, including Citibank, BOA, Deutsche Bank, BNP Paribas, ...

Snakeyes7 · Answer

I don't think they take too kindly to usury there. They'd be burned down pretty quickly.

Smegskull · Answer

Isn't there like a 15% tax on all business in Islam?

FenixG45 · Answer

Probably because of geopolitical & economical differences.

juliammm · Answer

They do, under different names :)

NathanDavis · Answer

must be not profitable... so why bother

QuietRunner · Answer

The interest rules...

KostasKouvalis · Answer

Because Muslims aren't allowed to charge interest

TonyMetal___1986 · Answer

They have their own banks i guess

chechememe95 · Answer

Because we do business differently than they do.

msc545 · Answer

I have no idea.

Just_Ken · Answer

Not allowed

slimyWitch · Answer

For what?

Why don’t major Western banks open branches in Muslim countries?

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