Islamic banking and finance has gained a global favor in countries which are dominated by Muslims and also the Non-Muslim countries other alike. The steady growth and acceptance of Islamic finance worldwide is the result of several significant factors, the most significant factor being the practices of Islamic finance being in compliance with Sharia principles. In the case of Bahrain, the role of Islamic banking to transform Bahrain into one of the major financial hub in GCC and MENA region is

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... ighly crucial. Islamic banking has created a niche" market for financial products and services that are Sharia complaint in an economy that is already home to a stable and substantial conventional banking system. In this paper, an attempt is made to highlight the role of Islamic banking in Bahrain and the factors that contribute to its worldwide expansion. The important organizations that are hosted by Bahrain which are crucial to the growth of Islamic banking and financial institutions worldwide are also discussed in detail.