Manama, Sept 08: Arab investors are looking increasingly to Islamic banks in the aftermath of the September 11 terror attacks, which prompted a clampdown at Washington's behest on suspect finances, bankers here said today. "In the three months after the attacks in the united states, deposits in Islamic banks were up five percent on their average," said Adnan Yussef, executive director of the Bahrain Islamic Bank.
Yussef, speaking to a news agency on the sidelines of a meeting of Arab Central Bank governors and heads of regional financial institutions in Manama, attributed the increase to "withdrawals of assets from western banks, notably American ones".
"These withdrawals are estimated at between 150 and 20 million dollars," he said.

Yussef said Islamic Banks had drawn flak from the west particularly politicians, through their "ignorance on the way these banks work".
"But after visits to the region, banking officials and economists have realised that these banks (in Bahrain) come under the control of the Bahrain Monetary Agency like other banks," he said.
Bahraini banker Abdullatif Janahi said the events of September 11 had "not affected the activities of Islamic Banks, although they raised a certain panic among depositors because of governmental and non-governmental steps adopted" in the fight against money laundering.
Bureau Report