LONDON (Reuters) -
Lloyd's TSB joins a small but growing list of UK banks offering Islamic financial services, stating on Wednesday that it now offers sharia compliant current accounts and mortgages throughout the country.
"From today, Britain's two million Muslims will have access to current accounts and mortgages which comply with Islamic law (sharia), in every one of the bank's 2,000 branches," the bank said in a statement.
Devout Muslims who invest along sharia guidelines will not purchase assets that pay interest, or that derive profits from alcohol, pork or gambling.
Lloyd's TSB said more Islamic financial products will be introduced later this year, including an Islamic student account.
The move coincides with increased investor interest in Islamic finance, which globally is estimated to have a market size of anywhere between $200 billion and $400 billion (109 and 218 billion pounds).
The current account Lloyd's TSB is offering will have no credit interest and no overdraft facility, but does provide a debit card and does not charge a fee or require a minimum balance.
Lloyd's TBS Islamic account holders will also be able to access their money via ATM machines, the internet or telephone.
Under the terms of the Islamic mortgage on offer the bank buys the home on behalf of the customer, contributing up to 90 percent of the purchase price. The customer pays the remaining percentage upfront and pays the outstanding sum over an agreed term, together with a rental payment.
Excuse me but . . . . . . Investing involves laying out cash for funding business etc and getting a profit on that outlay. According to the Qur'an that is 'usury' and against Islamic principles as taught by the Prophet Mohamed. If you didn't work for it, it is not good.
Here in Saudi the Stock market was opened up last year to all Saudis. Ordinary people were borrowing SR50/1oo,000 to invest on the market. People were making a killing. Doubling their money in little over a week. Westerners were not allowed (a little racist thing they have here). When then the market started to fail, they began to loose big time. Westerners were invited in with open arms. I am sure that the idea was, let the westerners in to help the market recover. Take out Saudi money and leave the westerners to flounder. Is that the kind of Islamic banking Lloyd's are offering.
Saudi mortgages are really great. A Saudi can go to the bank and get a loan to build a house. The repayments don't have start till the house is finished. You you have no idea how many unfinished houses there are in Riyadh. Bet Lloyd's don't go down that route.
the sum paid for the use of money, hence interest; not, as in the modern sense,exorbitant interest. The Jews were forbidden to exact usury (Lev. 25:36, 37),only, however, in their dealings with each other (Deut. 23:19, 20). Theviolation of this law was viewed as a great crime (Ps. 15:5; Prov. 28:8; Jer.15:10). After the Return, and later, this law was much neglected (Neh. 5:7,10).
Source: Easton's 1897 Bible Dictionary