Al Rayan Bank launches free guide to ethical banking for UK consumers
With demand for ethical banking on the rise, Al Rayan Bank, the UK’s only wholly Sharia compliant retail bank has launched a guide to ethical, Sharia compliant banking.
The guide, ‘Ethical Banking for Everyone’, provides an overview of how Islamic finance works, what makes it an ethical choice for consumers of any faith, and a glossary of key terminology. The guide also answers frequently asked questions about Islamic banking.
The Sharia principles that underpin Islamic banking make it an ethical choice for both Muslims and non-Muslims who are looking for an alternative to conventional interest-based banks. Sharia-compliant banking operates without interest and is founded upon the principles of trade, entrepreneurship and risk-sharing. Speculation is not permitted; instead activities must be backed by tangible, underlying assets. The source of an Islamic bank’s funding and profits must also be ethical and cannot be from businesses that are considered unlawful under Sharia, such as companies that deal in alcohol, gambling, pornography, tobacco, or arms.
Awareness of ethical, and specifically Islamic, banking is continuing to grow in the UK. In 2013, British Prime Minister, David Cameron announced his plans to make London one of the “great capitals of Islamic finance”. He also revealed plans for a new Islamic index on the London Stock Exchange (LSE). Subsequently, the UK became the first western country to issue a Sukuk, or Islamic bond, which raised £200 million in 2014.
In February 2016, the Bank of England, in recognition of the fact that Islamic banks are currently unable to use its liquidity facilities, announced that it is looking at ways to provide a Sharia compliant facility to UK banks. The closing date for responses to its consultation paper on the issue is 29 April 2016, after which the Bank of England will decide upon the most suitable approach. If a model is approved and implemented, it could provide an important foundation to help establish London as a global centre of Islamic finance to rival Malaysia and the UAE.
Over the last few years, Al Rayan Bank has seen significant growth in its non-Muslim customer-base. It estimates that 86% of fixed-term deposit savings customers who joined the Bank in 2015 were non-Muslims. They were attracted by the competitive expected returns, the Bank’s strong track record of good customer service and the ethical reputation enjoyed by the Islamic banking sector.
Al Rayan Bank has been recognised as an ethical alternative to conventional banks by the Move Your Money campaign and Ethical Consumer magazine, which places Al Rayan Bank in the top ten ethical current account providers. The Bank is an accredited ‘Living Wage Employer’, voluntarily opting to pay its employees a ‘Living Wage’ which is significantly higher than the current minimum wage and the new compulsory National Living Wage, to be introduced this year. In addition, the Bank was recently accredited as an ‘Investors in People’ organisation, demonstrating the signs of a great employer with a clear commitment to sustainability.
‘Ethical Banking for Everyone’ is available to download for free from www.alrayanbank.co.uk/ethical-banking-for-everyoneGo Back