First Islamic Bank opens

Western Europe's first Islamic Bank opens its doors in London today.

09:08 22 September 2004

Western Europe's first Islamic Bank opens its doors in London today.

Islamic Bank of Britain will begin operating its first branch on Edgware Road in the north of the capital this morning, with plans to open other branches elsewhere in the country.

It will be the first time that Britons will have access to banking facilities from a British bank that is operated in accordance with Islamic Sharia'a principles.

The Financial Services Authority (FSA) approved the plans last month and will regulate the bank in line with UK banking regulations and customer safeguards.

Sharia'a principles prohibit the giving or receiving of interest, but the bank will trade in Sharia'a compliant investments and share the profits with its customers.

Islamic law also stipulates that all money must be invested in "purely ethical industries", meaning that the bank will not work with businesses dealing in tobacco, alcohol and pornography.

The bank cannot trade money for money, but money can be used to buy goods or services, which can then be sold for a profit.

Savings accounts through the Edgware Road branch will be offered immediately, as well as nationally through postal and telephone banking.

Current accounts and loans will be available from November, with mortgages, credit and charge cards and small business banking accounts to follow next year.

The bank also plans to open branches in Birmingham and Leicester in November, with a further eight branches planned in 2005. Internet banking is due to be launched in April of next year.

"We are delighted to be opening our first branch," managing director Michael Hanlon 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. Our products will be equivalent to those available in a conventional bank and competitively priced."