Riba (interest ) is haram - and its alteranative

First UK Islamic bank opens its doors Sandra Haurant
The Islamic Bank of Britain opened the doors to itsfirst branch, in Edgware Road, London, today. Whileother banks offer individual products that comply withIslamic rules, this will be the first bank in the UKthat operates wholly in accordance with Islamic shariaprinciples. Under sharia law, all money must be invested in purelyethical industries, so the bank will not invest in anybusiness involved with tobacco, alcohol orpornography, for example. Islamic law forbids themaking of money with money, and giving or receiving ofinterest is forbidden. Similarly, money cannot besimply traded for money, Instead, profits can be madeby the buying and selling of goods and services.From today, the bank will be offering a range ofsavings accounts through its London branch, and willalso offer access to the accounts across the countrythrough postal and telephone banking. Instead of paying interest on savings accounts, thebank will trade in investments which comply withsharia law. The profits from those investments willthen be shared with savers. The bank will offer current accounts and loans fromNovember this year, and mortgages, credit or chargecards and small business banking will be availablenext year.Further branches will be opened in Leicester andBirmingham in November, and there are plans to openeight more branches, plus an internet bankingfacility, in 2005. While the bank strictly complies with shariaprinciples, the services it provides are available toeveryone.Michael Hanlon, managing director of the Islamic Bankof Britain, said: "We are delighted to be opening ourfirst branch. It marks a new era in Islamic banking inthe UK and the beginning of our work to broaden ourproduct offering and branch network. "The current additional capital raising taking placewill provide funds to allow us to implement theseimportant growth plans, and we are confident that wecan provide customers with a range of sharia compliantproducts and services. Our products will be equivalentto those available in a conventional bank andcompetitively priced," he said.A supervisory committee, made up of a group of Islamicscholars, will ensure that the bank adheres fully tosharia principles. The committee will approve allservices, activities and investments before they go onthe market. The bank will also be regulated by theFinancial Services Authority and will meet with UKbanking regulations.

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