Dundee University will unveil its MSc in Islamic accounting and finance at a conference on ethical finance in Edinburgh today. The course has been created to meet increased demand from the banking sector.
Dr Rania Kamla, a lecturer in the accountancy and finance department at Dundee who will lead the new course, said high street banks were increasingly catering for Muslims and needed knowledgeable staff.
She said Islamic banking should not invest in areas in conflict with the religion's teachings such as pork products, alcohol, the arms trade, or pornography.
"But it is also about the deeper impact, so it would also encourage investment in communities and try to reach out to disadvantaged groups, "she added.
There is only one dedicated bank that adheres to the teachings of Sharia law, the Islamic Bank of Britain.
Dr Kamla said: "It was originally based in London and Birmingham, but has now expanded to Scotland. Up to 20 financial institutions in the UK now provide Islamic products, including HSBC. It is not allowed in Islam to charge interest, therefore they promote interest-free banking.
"Instead, they depend on profit and loss sharing, so you both share in the risk."
The MSc course, which begins in September, is expected to take a handful of students in the first year while the university gauges demand.
Omar Shaikh of the Islamic Finance Council said: "This is a wonderful opportunity for Scottish students to study Islamic finance, in Scotland.
"Education is extremely important if we are to realise the ambition to make Scotland and UK a global gateway for Islamic finance."
Legal firm Tods Murray, which created the first Islamic mortgage in Scotland, organised today's conference. Partner Graham Burnside said: "The role of Islamic finance and ethical-based financial systems in today's economy has not been fully explored, and the launch of Dundee University's course is an important step to ensure that Scotland does not miss out on the potential it offers."
The Islamic and Ethical Finance Conference, takes place at the Tods Murray headquarters in Edinburgh Quay, and will explore the various faces of ethical finance and Scotland's heritage in faith-based finance.
Speakers include specialists from the Islamic finance industry and representatives from the Church of Scotland, the Co-Op Bank and the Scottish Widows Investment Partnership.
Professor Christine Helliar, dean of the school of accounting and finance at Dundee University, said of the new course: "Graduates will be able to bridge the gap between accounting and financial knowledge and how it relates to Islamic law. The programme will include an introductory element to the main issues, coverage of the most popular products and how they relate to Sharia law, and how conventional banks compare with the practices of Islamic banks."
UNDER Islamic teaching usury is not allowed therefore borrowing money must be done under special arrangements.
For example if you wanted a mortgage to buy a property, the bank would buy the house and then sell it back to you but charge you profit.
In other words the deal would be based on profit sharing by both parties rather than interest payments.
This is because profit is allowed under Sharia law while charging interest on debt is considered immoral.
Islam also precludes banking which invests in businesses which go against the teachings of the religion.
So for example, it would be un-Islamic to invest in the arms trade or pornography.
But it would also not be seen as ethical to gain profit out of firms that are involved with pork products or alcohol which are also barred by the religion.