The Islamic Bank doesn't charge interest in the traditional way and avoids unethical lending.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The Islamic Bank of Britain was formed in 2004, in response to a demand from British Muslims for Sharia compliant financial services and products. The bank was created by a group of Middle Eastern investors. Since its inception, the bank has had to deal with difficult economic conditions as a result of the worldwide economic downturn, but it continues to grow.
As of the beginning of 2014, the bank is now owned by the Masraf Al Rayan Bank Group, one of the largest Islamic banks in the world.
There are at present several branches and agencies of Islamic Bank of Britain across England. The Islamic Bank offers a variety of different Sharia compliant products and services, including savings accounts, current accounts, and mortgages. It also offers investment facilities, financial planning and international money transfer.
Sharia compliant mortgages include home purchase plans and buy to let purchase plans. In order to be Sharia compliant, Islamic Bank of Britain mortgages do not involve any interest charges by the bank. Instead the products are based on joint ownership.
Islamic Bank of Britain mortgages for home buyers operate under the principles of a co-ownership agreement with leasing. Each monthly payment is comprised of two parts: a rental payment and an acquisition payment. At the end of the mortgage term, ownership of the property is transferred to the customer.
Buy to let Islamic Bank of Britain mortgages work in a similar way to the bank’s home purchase mortgages, but there is one key difference. Each payment made to the bank covers the rent that Islamic Bank of Britain charges the customer. At the end of the term, the customer will not own any of the property and therefore he or she will need to have a plan in place to acquire the bank’s share.
The bank charges competitive rental terms and any income generated from the property is lawful and ethical under Sharia law.
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