Islamic banking is based on core principles of the religion. So it is striking that some banks are removing the word “Islam” from their names — a sign of both the potential of Islamic finance to grow, and the obstacles to it becoming mainstream.
In January, Dubai-based Noor Islamic Bank changed its name to Noor Bank. Abu Dhabi Islamic Bank (ADIB), the emirate’s largest sharia-compliant lender, now plans to call itself Abu Dhabi International Bank when operating abroad.
In both cases, the changes are part of the banks’ plans to expand. They aim to move well beyond a relatively small group of customers who stress religious permissibility, to a much larger customer base for whom pricing and service quality are key. This approach could help Islamic banks establish themselves globally, not just in the Muslim-majority regions of the Gulf and southeast Asia, and appeal to larger numbers of non-Muslims as well as Muslims.
But the banks feel that to broaden their appeal and compete directly with conventional institutions for customers, they need to play down their Islamic nature among the general public.
“Rebranding is an essential part of widening the appeal of the industry, whether we call it ethical, alternative or sustainable finance,” said Yerlan Baidaulet, a member of the board of executive directors at the Saudi Arabia-based Islamic Development Bank, a multilateral institution.
“Our mindset has to be global, we have to think wider in terms of customer appeal. Why monopolize the concept and keep calling it only Islamic?“
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