Islamic Finance

If you are Muslim and are concerned about the financial products that comply with Sharia law, there are more and more options available to you today.

The first Islamic bank in the United Kingdom, the Islamic Bank of Britain, opened its headquarters in Birmingham in 2004, offers a range of products and services such as pensions, mortgages and loans.

The main requirement for financial products and services under Sharia

The law is that neither the interest nor the payment of cargo, such as drawing money from money is considered usury, and not to invest in companies that are considered immoral, such as those related to alcohol, snuff, pornography or gambling.

As often happens when a long-loans that the bank will buy a starting point for the customer at a fixed price and rent or sell to them, with repayments to be made in advance. The bank makes money along the lifting of a burden of payments for the customer.

With investments, Islamic finance works on the basis of the pieces, as well as the risk reward. Both agreed with the customer and the bank deadlines for the sharing of the risks of any shortfall in investment and profits shared equally between them.

The four main modes of Islamic banking, says murabaha, where a purchase is made by the bank and the client without any re-sell the interest payments; musharaka, a company in which the rewards and risks -- ie, profits and losses - are shared by both the bank and the customer in an investment; mudaraba, when someone puts its investment in the hands of an expert who invests for them and shares of profit, but not the risk of losses, and ijarah, a customer Printed lease so that the products obtained from the rental payments over a period of time and the bank did win the goods at the end of the back.

Many major banks offering Islamic products, and there are some Middle Eastern banks with branches in the UK that provide financial products and services suitable for Muslims.

The government introduced Kindt married Bank funds in 2005 to help new parents to save for your child's future to begin. At the birth of a child, there are 250 pounds in vouchers to invest on their behalf, and 250 extra pounds on the seventh anniversary of the child. The additional contributions of up to £ 1200 can be supplied annually, and the money in savings accounts or invest in securities, or a combination of both (a deposit account).

Compatible with Sharia bank Kindt married funds are also available for children from Muslim families, and is provided by the Mutual children. This is an account of the custodians, in which stocks for the child spends 13 and running the funds in the savings account or lower risk investments such as bonds. This seeks to reduce the impact of any stock market collapsed in the preparation of its 18th anniversary in.

All investments are made in Islamic funds that do not compromise the principles, and not the interest paid on savings.

Mortgages

Since the commercial mortgage loans to the load, is not considered acceptable to the Islamic faith. However, as most people can not pay in cash to pay for a property to buy in all, there is a demand for Sharia compliant with mortgages among the Muslim community. Many High Street banks now offer such products, such as the Islamic Bank of Britain. An Islamic mortgage normally works by means of ijara, the hiring of an agreement in which the bank acquires possession on behalf of the customer and charges rent to them (including the price of treatment) for the purchase price refunded by point what the client owns all the possession. As with other mortgages, the bank reserves the right to hold up to this point.

Bank accounts

If the Islamic faith to life, no bank accounts while charging or paying of interest. This usually means that no bank debt or credit card facilities for current accounts and savings accounts to invest money to make a profit instead of interest to be paid the same.

The pension scheme

A few financial organizations now offer pension plans to Islamic Muslims must give their consent for their retirement without having to compromise their faith. These schemes invest only in funds considered in the context of sharia law to be ethical - that is, without investing in companies involved in alcohol, snuff, pornography or gambling, or companies such as the Banks loading rate advantage. If I am not by any dividends as a result of corporate involvement in any of these areas is money 'that' to give to charity instead of granting it is purified those who invest in the system