CAIRO – Seeking to take a share of the booming industry, a British minister will be calling Thursday, June 6, for turning London into a global center for Islamic finance.
“It’s about making Britain the preferred choice for the Muslim world to invest in and do business in,” senior Foreign Office minister Baroness Warsi will say in a speech to the Oxford Center for Islamic Studies cited by London Evening Standard.
Islamic banking is one of the fastest growing financial sectors in the world.
Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.The Shari`ah-compliant system is now being practiced in 50 countries worldwide, making it one of the fastest growing sectors in the global financial industry.
Warsi opines that London has a golden chance to get a good share of the booming Islamic finance.
“It is not a silver bullet but it is a golden opportunity,” she will say.
Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
Landmarks
Baroness Warsi says Islamic finance has been used to fund London’s landmarks as the Shard, the Olympic Village and redevelopments at Chelsea Barracks and Harrods.
“Each is a powerful reminder of the sector’s rapid rise and the importance of engaging with potentially lucrative new markets in the Muslim world and beyond,” the minister will say.
She unveils that the British government is considering a major overseas promotion for British financial institutions to draw Islamic investments.
“There is a clear demand which must be met and, in order to retain London’s status as the financial center of the world, the City must respond.”
The United Kingdom is one of the leading countries in the European Union to have Islamic banks. It is also developing its takaful market for Islamic insurance.
The UK also has a strong foothold in developing products such as commodity murabaha – Islam’s version of interbank short-term lending and syndicated loans.
Moreover, London has established the first secondary market in sukuk outside the Islamic world to help Islamic investors who seek to buy property and assets in the UK in a way that fits in with their religion, which bans earning interest, speculating or risk-taking.
London is also advanced in Islamic retail services, with institutions offering a range of Islamic banking products, such as mortgages and car loans.
The Islamic Bank of Britain, granted a license in August 2004, became the first Islamic bank in the UK and has continued to attract customers for mortgages.
(On Islam / 06 Jun 2013)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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