"We need new approaches and instruments to meet consumer demands of Muslims and to spread to Europe, the United States, and the Far East," Ufuk Uyan, president of special finance houses (Islamic banks) in Turkey, told one session.

Some 60 Muslim scholars, academics, bankers, and investors from 20 countries addressed some 400 participants from 40 countries during the three-day “International Islamic Finance Forum” on issues related to the multi-billion-dollar Islamic finance industry.

The forum, the sixth of its kind and the second in Istanbul, addressed urgent issues on Islamic financial laws, regulation, new Islamic financial and investment products, and other issues.

Dubbed one of the world's fastest growing industries at 15 percent annually, Islamic finance is currently estimated to be worth more than $300 billion with more than 200 Islamic finance institutions operating.

Hundreds of conventional banks and investment companies, some Western, have established special units to deal in products compliant with the Islamic laws of Sharia.

The Islamic Bank of Britain (IBB) was launched last week as the first bank in Europe to specifically address the financial needs of Muslims, who number 1.8 million in Britain alone.

Islamic Sharia law imposes a series of restrictions on banks, including a ban on charging interest for loans and prohibiting clients' money from being invested in activities linked to alcohol, tobacco, and pornography.

To deal with the no-interest rule, Islamic financial institutions, with the help of religious scholars, have introduced several products based on the concept of profit-and-loss partnership.

The notion of Sharia-approved finance first emerged in Egypt at the start of the 1960s, and was developed over the past three decades in the oil-rich Gulf Arab states.

Speakers at the opening session raised a number of questions highlighting disputes and conflicting interpretations of Islamic law and methods of its application to financing.

"fatwa s [religious edicts] vary by time, place, and circumstances," Said Mahmoud Al Gamal, economics professor at Rice University, Texas, who was recently appointed by the US treasury department as its first scholar-in-residence on Islamic finance.

"Jurists [scholars] must start to think dynamically and not statistically," said Gamal, asking: "Do we have Islamic finance or Islamized conventional finance?" and hinting that the gap was narrowing.

But Imran Usmani from Pakistan's Center for Islamic Economy stressed the distinct difference between conventional banking and Islamic finance, insisting that the process of earning should be compliant with Sharia.

Organized by the Dubai-based Institute for International Research (IIR) in association with Dow Jones Indexes, the forum is held twice a year in Dubai and Istanbul respectively.

See also:AFP