KUWAIT CITY, Sept 15, 2009 (AFP) - The Kuwaiti cabinet has decided to establish a new Islamic bank with three quarters of its shares offered free to citizens, the official KUNA news agency reported on Tuesday.
The Warba Bank, the fourth Islamic bank in the oil-rich emirate, will have a capital of 100 million dinars (350 million dollars) in which the state-run Kuwait Investment Authority, the sovereign wealth fund, will own 24 percent.
The remaining 76-percent stake worth 265 million dollars will be distributed equally to the 1.1 million Kuwaitis with the government footing the bill.
The decision, taken by the cabinet late on Monday, comes on the eve of the Muslim feast of Eid al-Fitr next week, for which the government has allocated a full one-week public holiday.
Kuwait already has three Islamic banks, including Kuwait Finance House, one of the world's largest Islamic banks. It has also given approval to a conventional bank to become Islamic.
In addition, the emirate has seven conventional local banks and branches for six international and Gulf banks.
The foreign banks include world banking giants BNP Paribas, Citibank and HSBC, besides Abu Dhabi National Bank of the United Arab Emirates and Qatar National Bank.
Qatar's Doha Bank and Saudi Arabia's largest bank Al-Rajhi have been granted licences to operate in the emirate, which opened its doors to foreign banks in January 2004.