Islamic Bank of Britain launches in London

9/22/2004 7:47:00 AM GMT

The Islamic Bank of Britain; the first Islamic law compliant bank in the country, will launch in London on Wednesday.

The first branch of the Islamic Bank of Britain is located in Edgware Road, London, a neighborhood that is popular with the Arab community.

The project was approved in August by the City regulator; the Financial Services Authority.

The bank will comply with Sharia Law, which forbids interest payments and stipulates that charges should be agreed in advance.

Sharia Supervisory committee

A Sharia Supervisory committee that includes experts in the Islamic law and how it can be applied to personal finance products will oversee all the services offered by the bank.

The committee will meet regularly to study all contracts and agreements that are related to the transactions. They will also advise and sanction any new products or services.

Starting Wednesday, the bank will provide savings accounts at its Edgware branch and also nationally through postal and telephone banking.

The savings account will not offer interest on users’ funds; instead the bank will trade in Sharia compliant investments and share the profits with savers.

Future plans

Finance products, such as loans, as well as current accounts will be available in November, with mortgages, credit and charge cards and small business banking accounts available in 2005.

The bank plans to establish eight other branches around the country, in Birmingham and Leicester in November 2004. It also plans to set up eight other branches in 2005.

Internet banking services will be launched in April 2005.

Michael Hanlon, the managing director of the bank said; "We are delighted to be opening our first branch,"

"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." He added.