* 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.

As HSBC continues its commitment to make Shariah compliant products more widely available to Britain’s 1.6 million Muslims, residential leasehold flats1 will now qualify for Amanah home finance and the minimum balance on the Shariah current account has reduced to £2502 for both new and existing customers.

Amjid Ali, UK Head of HSBC Amanah, comments: "Purchasing a leasehold property using a Shariah compliant home purchase scheme is more complicated than using a conventional mortgage because the bank is effectively sub-letting the property to the customer, which requires permission from the leaseholder prior to completion."

"HSBC Amanah has the expertise to overcome such complexities and works closely with an independent Shariah supervisory committee of world renowned scholars to ensure our products adhere to Shariah law. Our services are available from a team of specialists across the UK in over 70 branches, including 19 centres of excellence in key areas with a large Muslim population."

"The Islamic financial services sector is continually evolving and future developments from HSBC Amanah are likely to include the introduction of Takaful3 insurance, commercial finance and savings accounts."

Amanah home finance

HSBC buys the property and leases it back to the customer over an agreed term -typically 25 years. The customer makes monthly payments made up of rent and payments towards the purchase price. HSBC owns the property until the customer has made their final payment.
In Islamic terms, the rent is not another name for interest; it is seen as a fair payment for use of the property rather than a charge for borrowing money.
Customers can arrange for the property to be sold at any time.
The rent rate is reviewed on 1 July and 1 January every year.
Amanah current account

To comply with Shariah, the account has no overdraft, debit or credit interest.
Money paid is administered in accordance with Shariah and not used for interest generation.
Amanah pension fund

The fund tracks an index that includes the top 100 companies that are engaged in Shariah-compliant activities.
Features include daily dealing, a passive investment policy and global equity exposure.
Dividends that are generated by fund revenues from non-Shariah business are ‘purified’ by giving them to charity through the HSBC Community Foundation.
The fund is appropriate for defined benefit and defined contribution pension schemes in the UK.
For more information on HSBC Amanah, customers can visit the website at www.amanahfinance.hsbc.com

Footnotes

1. For properties with an unexpired lease of 50 years, plus the tenancy period.

2. Minimum balance reduced to £250 from £1,000

3. Takaful (Islamic Insurance) is a Shariah compliant insurance policy.

Shariah, banking and investment
As the payment or receipt of interest is prohibited under their religion, Muslims have been faced with having to purchase a property outright with cash or give up their dreams of owning by renting instead. Similar restrictions apply to the payment or receipt of interest on current accounts so conventional overdrafts are not suitable. Islamic restrictions on the payment and receipt of interest prevent some Muslims from considering equities investment, including that for pensions. While shares and dividends are acceptable, speculation is forbidden. Those investments, which are permissible (Halal), are so only if they exclude companies with income from alcohol, pork-related products, pornography and nudity, conventional financial services, gambling, tobacco, armaments and human or animal genetic experimentation.

Product information
The Amanah home finance and current accounts were launched on 14 July 2003. The HSBC Life Amanah Pension Fund was launched on 13 April 2004. Customers can transfer their existing mortgage to HSBC’s Amanah home finance scheme and all products are available to Muslims and non-Muslims.

The Muslim Council of Great Britain and Islamic scholars
The Muslim Council of Great Britain is an umbrella organisation that promotes co-operation, consensus and unity on Muslim affairs in the UK. HSBC is advised by an independent Shariah supervisory committee consisting of three of the most eminent scholars in the field of Islamic finance: Justice (retired) Mufti Muhammad Taqi Usmani from Pakistan; Shaykh Nizam Yaquby from Bahrain; Dr. Mohamed Ali Elgari from Saudi Arabia.

HSBC Amanah
HSBC Amanah is the Islamic financial services division for the HSBC Group responsible for the development of Islamic financial products for distribution to customers of the HSBC Group. Its mission is to ensure that HSBC is the leading provider of value-added Islamic financial products and services. Headquartered in Dubai with regional representatives in London, New York, Dubai, Riyadh, Kuala Lumpur, Dhaka and Jakarta, HSBC Amanah Finance is uniquely positioned to understand, structure and deliver financial solutions that are compatible with the requirements of Shariah.

HSBC Community Foundation
The HSBC in the Community Middle East Foundation was established in 1996 to fund opportunities for youngsters across the region. The Foundation, a £1 million charitable and community initiative, funds educational, environmental and other projects. Since its creation, the Foundation has supported over 100 students from the Middle East to attend English language scholarships in the United Kingdom. The scholarship allows the students to attend two months of English courses and experience a British way of life during the summer. The Foundation has also supported other educational and environmental programmes in schools as well as other activities such as Raleigh International Expeditions. In Jordan it is supporting the SOS Village in Irbid for orphaned children and a youth development project. In Lebanon and UAE it is funding teacher-training seminars.

HSBC Bank plc
HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc, and a member of the HSBC Group. Serving over 110 million customers worldwide, the HSBC Group has approximately 10,000 offices in 76 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$1,154 billion at 30 June 2004, HSBC is one of the world’s largest banking and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.