22/09/2004

Britain's first wholly Sharia'a bank opens in London

The first branch of Britain's only wholly Islamic bank – which will operate strictly in accordance with Sharia’a principles – has been opened in London today.

Through its Edgware Road branch, the Islamic Bank of Britain will enable the country's 1.8 million Muslims to trade in Sharia’a compliant investments and share the profits with its savers.

Under Sharia'a law, the giving or receiving of interest is forbidden and money cannot be simply traded for money. Funds can be used to buy goods or services, which can then be sold for a profit.

The bank has also said that it will not invest in businesses dealing with interest, tobacco, alcohol, pornography for "purely ethical" reasons.

Michael Hanlon, Managing Director, said: “It marks a new era in Islamic banking in the UK and the beginning of our work to broaden our product offering and branch network… [And] we are confident that we can provide customers with a range of Sharia’a compliant products and services. Our products will be equivalent to those available in a conventional bank and competitively priced.”

To ensure the bank is operating in a wholly Sharia’a compliant way, all services, activities and investments will be approved by a group of Islamic scholars acting as the bank's Supervisory Committee.

Additional branches will open in Birmingham and Leicester in November 2004, with a further eight branches planned in 2005. Internet banking will be launched in April 2005.

Islamic Bank of Britain will be regulated by the FSA and will meet UK banking regulations and safeguards for the customer.

(gmcg/mb)

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