“It was a huge success … we instructed the book runners to try and spread the issue as far they could across the Islamic world. We wanted it to be a commitment from the UK to support the development of Islamic Finance market, ” Leadsom said.

The sukuk was oversubscribed 12 times, displaying enormous appetite from central banks, sovereign wealth funds across the globe.

The UK government is not planning to issue more sukuks, but would like to see more of companies and governments to issue more such bonds.

“There are plenty of other countries considering the application of sovereign sukuk for their financing needs,” said Leadsom.

Because of its status as a top global financial centre, London has attracted a large amount of Islamic business; more than $34 billion till 2013 worth of sukuk, have been issued through the London Stock Exchange.

But competition from cities where Islamic funds originate is increasing. Kuala Lumpur is building its credentials as a centre for foreign companies to issue sukuk outside their domestic markets, while Dubai revised regulations to attract sukuk issuance and trading.

Involvement:

“We are also looking to promote Islamic insurance and we also taken steps to develop insurance regulations and insurance products that are Shariah compliant,” Leadsom said.

“We are also looking at Sharia-compliant mortgages and student loans and also opportunity finance for inward investment for example some of our house building in the UK,” she added.

The Bank of England is also looking at helping with the liquidity requirements of Islamic Banks. There are six Islamic banks and 16 others offer Islamic products.

“We have a reasonable amount of involvement in Islamic finance in the UK and very importantly our big accountants and law firms, about 25 have Islamic departments, which advise on Shahriah compliance,” Leadsom said.