Riba (interest) , its alternative

Lloyds TSB targets Muslim market Sandra HaurantTuesday February 15, 2005 http://www.guardian.co.uk/business/story/0,3604,1415095,00.htmlLloyds TSB today announced the launch of a currentaccount that adheres to Islamic rules on finance.The account has been designed to comply fully withIslamic law, or sharia, which forbids the payment andreceipt of interest, or riba. As such, the accountwill not pay interest on credit balances or have anoverdraft facility.The funds held by the bank on all shariah-compliantaccounts will also be held according to Islamic law.Under shariah, Muslims are not allowed to invest incompanies related to certain types of industry, suchas alcohol, tobacco, pornography, armaments andgambling.The new account is to be piloted in a handful ofbranches in cities across the UK, including Birminghamand Luton.Lloyds TSB is planning to launch furthersharia-compliant financial services later this year.There are almost two million Muslims in Britain, andthe bank will be competing for customers with HSBC,which has offered Islamic current accounts andmortgage-style products since 2003, and asharia-compliant pension since 2004, and with theIslamic Bank of Britain, the first bank to operatesolely in line with Islamic law.The newest branch of the Islamic Bank of Britain openstoday in Leicester. Its first branch opened lastSeptember in London's Edgware Road, followed shortlyafter by a second branch, in Birmingham.Gordon Rankin, current accounts director at LloydsTSB, said: "The Muslim community is one of the fastestgrowing in the UK and is very much part of the fabricof British life. However, until now their bankingneeds have been largely uncatered for and many BritishMuslims have often had to bank in a way that isagainst their principles."Provision of sharia-compliant financial servicesremains limited, and there has been particular concernamong Muslims due to receive the new child trust fundvouchers that there are no sharia-compliant productsin which to invest the money.Parents have a year in which to decide how to investtheir child's fund. For those who do not make achoice, the Inland Revenue will automatically investthe money in a stakeholder account, which could investin companies that do not comply with sharia.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Islamic banking 'goes mainstream' http://news.bbc.co.uk/1/hi/uk/4264939.stmThe first High Street bank account compatible withIslamic sharia law is due to be introduced. The Lloyds TSB account will offer no interest oroverdraft facilities, as under Islamic law the receiptand payment of interest is forbidden. The introduction of the account follows the opening ofa specialist Islamic bank in the UK last year. Gordon Rankin of Lloyds TSB said its new account wouldmake Islamic banking "mainstream". "Our research shows that over three-quarters ofBritish Muslims want banking services that fit withtheir faith. "However, until now their banking needs have beenlargely uncatered for and many British Muslims haveoften had to bank in a way that is against theirprinciples," Mr Rankin said.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Q&A: Islamic finance Susan Smillie and Hilary OsborneTuesday February 15, 2005 http://money.guardian.co.uk/saving/banks/story/0,12410,1415117,00.htmlThe decision by Lloyds TSB to offer an Islamic currentaccount highlights the clash between the Muslim faithand the way western banks operate. Traditional UK bankaccounts and mortgages do not comply with Islam'ssharia law, so in the past people faced a big decision- compromise their beliefs or look for alternativeways to manage their finances.There are almost two million Muslims in the UK, soit's surprising that it has taken financial servicescompanies so long to wake up to this group ofpotential consumers by launching products which complywith Islamic law.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~