The Financial Services Authority (FSA) has today published a paper setting out its role in the development of the UK as the major European financial centre for Islamic financial products and services.
Worldwide, Islamic finance has grown in recent years at a conservative estimate of 10-15% per annum and is worth about £250bn globally

Lloyds TSB Islamic Financial Services is hitting the road this week, with a series of events showcasing the range of financial products it now offers to the Muslim community.
The products — an Islamic current account and mortgage — are designed to meet the banking needs of the UK's two million Muslims, for whom interest is forbidden, and are now available in more than 30 Lloyds TSB branches.

* Residential leasehold flats now qualify for Amanah home finance
* Minimum balance requirement on Shariah current account reduces to £250
HSBC Amanah - HSBC’s Islamic finance division launched in 1998 - introduced UK customers to the high street’s first Shariah home purchase scheme and current account in July 2003. Since then over 1,500 people have applied for £176 million of Amanah home finance and more than 1,000 Shariah current accounts have been opened. HSBC was also the first UK bank to offer trustees a Shariah pension fund in April 2004; it is now offered by over 10,000 UK employers as part of their stakeholder pension provisions.

The Children’s Mutual, the UK’s only provider specialising exclusively in long-term savings for children, has today announced that it will be launching the first Child Trust Fund (CTF) Stakeholder account that is compliant with the Shariah.
Ivan Lewis MP, Economic Secretary to the Treasury and Dr Akber Mohamedali, Treasurer of the Muslim Council of Britain, will attend the launch and be available for questions with David White, Chief Executive of The Children’s Mutual, on June 29.

Lloyds TSB has launched an Islamic home finance offer to help Britain's Muslims purchase their own homes.
It is one of a range of financial services which Lloyds TSB plans to launch for the Muslim community in the UK - many of whom have taken a traditional, interest based mortgage or choose not to buy their own homes, for religious reasons.

The Council of Mortgage Lenders today broadly welcomed the Chancellor’s Budget announcements on the housing and mortgage markets.
The CML is pleased that the Chancellor did not raise stamp duty, and is particularly pleased that double stamp duty on Islamic mortgages will be resolved. But the CML would have liked to see the thresholds raised, and continues to believe that longer term fundamental reform away from the existing "slab" structure of stamp duty is needed.

Bank Negara Malaysia is pleased to announce the execution of a Commodity Murabahah agreement with CIMB Bank Berhad, London on 20 June 2007.  The Commodity Murabahah Programme (CMP) introduced by Bank Negara Malaysia in March this year, is part of the diverse range of policy instruments in managing short-term liquidity in the Malaysian Islamic interbank money market.

Commodity Murabahah is a cash deposit product based on the globally accepted Islamic concept of underlying commodity transactions to facilitate liquidity management and investment. The CMP is a commodity-based transaction that utilizes crude palm oil based contracts as the underlying asset. To date, Bank Negara Malaysia has executed master agreements with eight islamic banking institutions in Malaysia and one in Saudi Arabia.

The global Islamic financial industry stands to benefit from the UK’s development as a more attractive marketplace for Syariah-compliant financing and investment instruments following initiatives announced in the UK budget on March 21.

Standard & Poor’s Rating Services said on March 23 that although Dubai has been the most active trading center for sukuk notes so far, this amendment to the tax law in the UK will make London more attractive for issuing and trading sukuk and provide greater clarity and certainty for investors and issuers.

"We estimate that up to 300,000 retail customers in the UK would be ready customers for Sharia-compliant banking services," said S&P credit analyst Anouar Hassoune in a report entitled -- "World's Islamic Finance Industry To Get A Boost From UK's Development As A Major Marketplace."

Peter Muir, tax partner at Deloitte, said: “Reforms to the taxation of Islamic finance should be applauded. The UK is the only country which is changing legislation to create a level playing field for both individuals and companies investing in Islamic finance products. 

• Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia is the fourth Chairperson of the Islamic Financial Services Board (IFSB) Council.

• Dr. Shamshad Akhtar, Governor of the State Bank of Pakistan is the Deputy Chairperson.
  
  
  

Tariq Hameed analyses the most popular type of Islamic mortgage, the ‘Diminishing Musharaka’, and explains how it differs from conventional mortgages and its treatment from a tax and regulatory perspective