In the past few decades, an increasing significance of Islamic finance has been observed. What is distinguishable about Islamic financial institutions is the necessity of conducting financial operations in compliance with sharia, which is a religious law of the Muslims. With the share of around 80% in total assets of Islamic financial institutions, Islamic banks play a dominant role in the Islamic financial industry. Islamic banks operate mainly in Muslim countries, but they also offer services in countries inhabited by Muslim minorities. The United Kingdom is one of those countries. It is worth noting that London, which is the main financial centre of the world, aspires to be the most important centre of Islamic finance in the non-Muslim world as well. The purpose of this article is to present the evolution and the state of development of Islamic banking in theUKas well as to analyse the factors of the development of Islamic banking in this country with an indication of the problems that may inhibit that development. The article uses descriptive and analytical methods of analysis, based mainly on the review of scientific literature, market reports, and statistical data.

In the past few decades, an increasing significance of Islamic finance has been observed. What is distinguishable about Islamic financial institutions is the necessity of conducting financial operations in compliance with sharia, which is a religious law of the Muslims. With the share of around 80% in total assets of Islamic financial institutions, Islamic banks play a dominant role in the Islamic financial industry. Islamic banks operate mainly in Muslim countries, but they also offer services in countries inhabited by Muslim minorities. The United Kingdom is one of those countries. It is worth noting that London, which is the main financial centre of the world, aspires to be the most important centre of Islamic finance in the non-Muslim world as well. The purpose of this article is to present the evolution and the state of development of Islamic banking in theUKas well as to analyse the factors of the development of Islamic banking in this country with an indication of the problems that may inhibit that development. The article uses descriptive and analytical methods of analysis, based mainly on the review of scientific literature, market reports, and statistical data.