Islamic banking offers ethical alternative to traditional banking, Al Rayan Bank’s Sultan Choudhury says.
The Chief Executive of one of the largest UK-based Sharia-compliant banks states that the basic principles of Islamic finance, as equitable distribution, prudent spending and working for the well-being of the community are universal, thus convenient for clients of all faiths.
“Al Rayan Bank works with its customers as partners, and does not invest their deposits in unethical activities, such as gambling, alcohol, pornography, tobacco, arms and other commodities in keeping with the values of Islam”, Choudhury underscores in an interview with The National.
Statistics and ratings compiled by the Ethical consumer magazine and Move Your Money campaign show that this financial institution is currently one of the top 10 ethical providers.
Moreover, Al Rayan Bank has introduced a differently structured plan called home-purchase plan (HPP) based on the Islamic finance principles of ijara (leasing) and diminishing musharaka (co-ownership). In general, both the client and the bank own share of the property. The customer pays rent on the property, gradually increasing his share through a monthly acquisition payment, no interest included.
The management expects that the non-Muslim customer base will continue to grow in the forthcoming period. Latest estimates show that more than a quarter of its customers are non-Muslim.
Sharia-compliant banks do not charge or pay interest on any of their products. According to these principles, interest promotes unfairness in financial transactions which ultimately leads to unfair resource allocation.