Saudi Arabia's biggest bank has responded to criticism of from Islamic scholars by pledging to convert to a full-fledged Islamic bank within five years.
The decision was made as the bank launched a $6 billion initial public offer, the largest equity sale in the Arab world.
State-owned National Commercial Bank (NCB), which has about $116bn of assets, is a mixed business: most of it conforms to Islamic principles such as bans on interest payments and pure monetary speculation, but some of it involves conventional banking. Some other banks in Saudi Arabia are also mixed.
Last week some members of Saudi Arabia's highest religious body, the Council of Senior Scholars, said investing in NCB was not permissible because too much of its business was non-Islamic.
In response, NCB's sharia board of Islamic scholars plus its chief executive, chairman and other officials reviewed a plan to convert NCB into a full-fledged Islamic bank within a period "that is expected not to exceed five years".
Subscriptions for NCB's IPO, the first by a bank in the kingdom since 2008, opened on Sunday and will run until November 2. Analysts believe the shares are cheaply valued at about £7.40.
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