Islamic Bank of Britain Launches Direct Banking Service, including New Current Account
The first totally Islamic British bank, Islamic Bank of Britain, is now offering its banking services nation-wide via a direct banking service. The Bank offers a current account as well as savings accounts and personal finance.
It marks the first time that Britain’s 1.8 million Muslims have had access to banking facilities from a British bank which is wholly operated in accordance with Islamic Sharia’a principles – wherever they live in the UK.
While there are other banks in the UK which offer products that follow Islamic principles, all have their origins within non-Sharia’a conventional banks.
Islamic Bank of Britain is regulated by the FSA and meets UK banking regulations and safeguards for the customer. It opened its first branch in London last year, floated on the Alternative Investment Market in October and now also has branches in Birmingham and Leicester, with a further 7 planned for 2005.
The launch of the direct banking service means that customers outside of the branch areas can use the Bank’s services. Access is currently via telephone and postal banking (to the Bank’s UK based customer service centre) with an internet banking service planned for launch at the beginning of 2006.
Islamic Bank of Britain makes every effort to ensure that it does not compromise Islamic principles and all products and services are overseen and approved by a Sharia’a Supervisory Committee. The Committee is comprised of world- renowned experts in the interpretation of Islamic principles and their applications within modern-day financial institutions.
New Direct Banking
Islamic Bank of Britain is now offering a broad range of products and services via its direct banking service and its branches.
These include a new current account with debit card and cheque book, savings accounts and personal finance (loans) facility. Other products will follow later this year.
New Current Account
The Sharia’a compliant current account allows customer to manage their money without compromising their principles.
It is an interest-free bank account, with customers neither paying nor receiving interest, and there is no minimum balance required. It comes with a debit card (or cash card subject to status) and cheque book. Funds can be withdrawn through branches of Islamic Bank of Britain, through any ATM displaying the Cirrus or Mastercard logo and via direct account transfer to another bank account. The Debit Card is Chip ‘n PIN enabled and operates at all retailers in the UK and abroad that accept Mastercard
Savings Accounts
Three types of savings accounts are available from Islamic Bank of Britain, all based on Sharia’a principles.
They do not offer interest on savers’ funds; instead Islamic Bank of Britain trades in Sharia’a compliant investments and shares the profits with its savers.
Deposits can be made at branches, by post or by direct account transfer.
The Sharia’a principle upon which these accounts are based is known as Mudaraba and is approved by the Bank’s Sharia’a Supervisory Committee.
The Bank provides complete transparency with bank charges and, while the investment methods are strictly in keeping with Sharia’a, it makes every effort to ensure that the profit rates paid on all its savings accounts are market competitive.
Savings Account
The Savings Account requires a minimum balance of just £1 and customers can make withdrawals with no notice required, without penalty.
Profits are calculated and paid on the last working day of every month.
Term Deposit Savings Account
This Account offers customers higher profit rates if they can tie up their savings for a minimum term. This requires a minimum deposit of £5,000, and the terms available are one, three or six months.
Profit is paid at the maturity of the term deposit.
Treasury Deposit Account
The Treasury Deposit Account offers flexible options and greater profit rates for customers who have £100,000 or more to deposit for an agreed term of one, three or six months.
Through a commodity transaction arranged through Islamic Bank of Britain, customers can invest their money for an agreed period and for an agreed profit rate.
Personal Finance
Islamic Bank of Britain’s personal finance facility allows customers to generate cash from a minimum of £1,000 up to a maximum of £20,000. Repayment periods of 12 to 60 months are available.
The personal finance facility is operated using Murabaha principles to transact in Sharia’a compliant commodities.
The process is simple for the customer, and simply requires one visit to the branch or application via post. Islamic Bank of Britain then works behind the scenes to ensure that the personal finance facility is run in accordance with Sharia’a. This means that the Bank buys commodities and then sells them to the customer for the cost plus the Bank’s profit. An independent agent then sells the commodities on the customer’s behalf and puts the resulting cash into the customer’s account. The customer then pays for the original purchase of the commodities over a period of time.
The customer is required to do very little and the transaction results in Islamic Bank of Britain providing the customer with money which the customer then pays for over an agreed period.
For more information on Islamic Bank of Britain products and direct banking service call 0845 6060786 or visit www.islamic-bank.com.
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