A fortnight after it was revealed by The Independent on Sunday that Lloyds banking group had abandoned its landmark Islamic mortgage offer, one of its rivals has outlined plans to expand the number of home loans offered which comply with sharia law.
The Islamic Bank of Britain has secured an extra £20m of investment from Qatar International Islamic Bank so that it can increase the number of sharia-compliant home loans and savings products. Under sharia, the payment and receipt of interest is banned, as is investment in areas such as arms manufacturing, alcohol and tobacco.
The IBB was launched in 2004 and has about 50,000 customers. The £20m cash injection will be seen as a badly needed boost to Islamic banking in the UK, as high street banks such as Lloyds and HSBC recently were reported to have reined back their investment in their own suite of Islamic products.
"This investment in IBB allows us to grow our business and remain the pioneer in providing innovative Islamic finance products to customers in the UK. Our customers will be reassured that one of our founding shareholders has continued to commit to us for the long term," said Sultan Choudhury, left, IBB's commercial director.