Islamic bank launches Sharia'a mortgage in Scottish expansion

Published on Thursday 2 April 2009 21:45

BRITAIN'S only Islamic retail bank is to make its first foray north of the Border, with the introduction of a Sharia'a-compliant mortgage product.

The Islamic Bank of Britain (IBB), which is based in Birmingham, announced at yesterday's International Islamic Finance Conference in Edinburgh that it is to launch its "Home Purchase Plan" in Scotland.

It is understood the launch is just the beginning of a wider push into Scotland – which is likely to include the opening of a physical branch and back office operations as well as the introduction of online retail banking for Scottish customers.

The mortgage is open to people of all faiths, but in compliance with Sharia'a law, it will not use any interest-bearing instruments like bonds or derivatives to finance homes. It instead uses its own cash or deposits from customers to fund loans.

Sultan Choudhury, commercial director at IBB, said: "We are really excited at the prospect of IBB's entry into Scotland, which we see as making a significant contribution to the region.

"The region is an important financial centre and is currently working hard to establish itself in the global Islamic Finance market, steered by the Islamic Finance Council UK. IBB has collaborated closely with the IFC as part of its impending launch in Scotland with the shared objective of putting Scotland on the map."

The product has been adapted from that available in England to conform with Scots law.

Owen Kelly, chief executive of Scottish Financial Enterprise, which co-hosted yesterday's conference, said: "IBB's entry to the market adds another option for bank customers in Scotland and widens the range of organisations operating in the industry."

Tariq Masood, chairman of the Glasgow-based Islamic Finance Council, added: "IBB's entry into Scotland is a key growth indicator for the UK's Islamic finance industry and a huge step forward for Scotland's ethical retail community."