Islamic Banking in Britain

An article by Helena Christofi

London is the leading Islamic banking center in the West. Islamist clerics with terrorist connections and a mission to Islamize Europe are infiltrating the United Kingdom through its banking system, and British officials are encouraging them. HSBC, Lloyds TSB, and Citigroup have opened Islamic banking units and branches throughout England. In 2005 the first stand-alone British Islamic bank, Islamic Bank of Britain, opened its doors. Middle Eastern Islamic banks have also set up shop in the UK.

Islamic banks are managed according to shari’a law, the defining principle being the prohibition of interest in all monetary transactions as commanded in the Qur’an. The other defining feature of Islamic banks is their operation of shari’a advisory boards comprised of Islamic scholars and clerics whose job it is to ensure that the banks’ activities comply with shari’a law. Proponents of the Islamic economic model (of which Islamic banking is a central pillar) argue that the Islamic system is superior to capitalism because it is structured around a strict code of ethics prohibiting exploitative practices, such as the charging of interest, with the aim of constructing a moral society. Capitalism’s single-minded focus on money, they argue, produces the social ills we see in the West whose manifestation would become impossible under the Islamic model.

Sheik Yousef Al-Qaradawi, a leading Sunni cleric, spiritual leader of the Muslim Brotherhood, and instigator and financier of terrorism in Europe and the Middle East, heads the fundamentalist European Council for Fatwa and Research, several of whose most prominent members sit on every major British Islamic bank’s shari’a board. Both Al-Qaradawi and the Council have expressed their hope that “Islam will return to Europe as a conqueror” by way of “preaching and ideology” or “by the sword.”

British Islamic banks have naturally positioned themselves as the moral alternative to conventional banking for Muslims (research done by Lloyds TSB found that over seventy five percent of British Muslims want shari’a-compliant banking products). But the banks are also targeting non-Muslims with the message that their services are ethically superior to those of the West, pushing the idea that interest – and capitalism – is unethical and should be replaced in Europe by the Islamic financial model. In such a situation the West’s conversion to Islam would occur in tandem. The message is catching on; Mufti Abdul Barkatullah, shari’a adviser to Lloyds TSB and imam at the North Finchley mosque, reports that twenty percent of the inquiries into Islamic products at one of Lloyds’ Islamic branches come from non-Muslims.

Barkatullah told The Guardian:

Interest is bad because it diverts resources from the poor to the rich and so concentrates wealth […] Instead of a few being superrich through interest, Islamic finance and its emphasis on the exchange of useful goods and services rather than exchanging interest on money, leads to a fairer society.

Barkatullah proceeded to advocate a ban on interest in the UK altogether, stating a ban could lead to “self-sufficiency” and “fairness in society.” The Guardian corroborates the position held by Islamic banking’s supporters, naively echoing their argument that interest discourages industry.
Wasn’t England the birthplace of the Industrial Revolution and creator of the common law, the most successful and equitable legal system in history?
But Barkatullah and The Guardian didn’t just fail to study up on basic British history; they also failed to reveal Islamic banking’s dirty little secret: Islamic banks charge interest just like their conventional counterparts.
Any bank, be it Islamic or conventional, risks running losses if it does not charge some form of interest; Islamic banks circumvent this danger by extending a type of Islamic “credit” that shifts risk to the borrower in a manner similar to interest.
An Islamic bank granting murabaha credit to a customer for an automobile, for example, would purchase the automobile for the customer for £10,000 and the customer would owe the bank £12,000 in a year’s time. Similarly, under the “diminishing musharaka” credit, the Islamic version of a mortgage, the bank and the customer purchase the property together. The customer must make monthly payments to the bank and pay a monthly rental fee, both based on the portion of the purchase price the bank still owns. Ironically, the interest this amounts to ranges between one and two percent higher than the interest on a conventional mortgage (4.75-5% APR conventional rate versus 6.16-6.45% APR Islamic rate).
Although the resale price of the vehicle and the rent paid on the house are akin to simple interest charges, the banks’ shari’a boards legitimate the charges by renaming them “commissions” or “profits.” Islamic banks could not remain profitable – or ideologically influential – if they complied with the Qur’anic injunction again interest.
The justification for replacing capitalism with the Islamic model is based on an intentional corruption of shari’a law, but the banks’ clerics don’t seem to mind undermining their theological philosophy, since the ethical image their misrepresentation has created for Islamic banking has managed to spread Islamic ideology to non-Muslims in Britain. According to Al-Qaradawi, Islam’s ideological infiltration into the West will be the vehicle through which it will establish an Islamic government over the entire globe:

Perhaps the next conquest [of Europe], Allah willing, will be by means of preaching and ideology. The conquest need not necessarily be by the sword […] Europe will see that it suffers from materialistic culture, and will seek an alternative […] It will find no lifesaver but the message of Islam […] Allah willing, Islam will return to Europe and the Europeans will convert to Islam. Then they themselves will be able to be the ones to disseminate Islam in the world.

Replacing western institutions with a global Islamic order is, in fact, the goal of Al-Qaradawi’s Muslim Brotherhood. According to its founder, Hassan Al-Bana, the Brotherhood seeks to “[reclaim] Islam’s manifest destiny; an empire, founded in the seventh century, that stretched from Spain to Indonesia,” and its 1982 “secret plan” exhorted its members “to channel thought, education and action in order to establish an Islamic power on the earth.” The Muslim Brotherhood is a central link between Islamic banking and Islamic fundamentalism; the first Islamic bankers were members of the Muslim Brotherhood who wanted to use “the structural power of bank ownership” to advance the fundamentalist movement in the Gulf States in the 1970s. Today, its most powerful progeny, the Kuwait Finance House, covertly finances fundamentalist groups in Kuwait and abroad.
Dr. Ahmad Al-Rabi, a former Kuwaiti official, stated in a 2005 newspaper column that the “beginnings of all of the religious terrorism that we are witnessing today were in the Muslim Brotherhood’s ideology.” This is not a casual exaggeration; the Brotherhood’s members founded Al-Qaeda, bombed the World Trade Center in 1993, and applauded the 2001 World Trade Center massacre as America’s just desserts.
With the Muslim Brotherhood directly involved in Islamic banking in Europe, Al-Qaradawi’s hope that Islam conquers Europe either by “ideology” or “by the sword” is becoming a palpable possibility. A look at two European Islamic banks is revealing:
Al-Qaradawi is a principal shareholder and past shari’a adviser to Bank Al-Taqwa, part of the Al-Taqwa group based in Lugano, Switzerland. The United States government has designated the Al-Taqwa group a financier of Osama Bin Laden and Al-Qaeda, and in 1995 Italy’s anti-terrorist agency DIGOS allegedly told Swiss federal prosecutors that Al-Taqwa “comprises the most important financial structure of the Muslim Brotherhood and Islamic terrorist organizations.” Like the Kuwait Finance House, Bank Al-Taqwa was established with significant backing from the Muslim Brotherhood, and the network is believed to have also financed Hamas, the Palestinian Liberation Organization, and similar Islamist groups throughout the Middle East. The list of Al-Taqwa’s shareholders corroborates the assessment made by DIGOS; among the shareholders is Muslim Brotherhood founder Hassan Al-Banna, Osama Bin Laden’s sisters Huta and Iman Bin Laden, members of Hamas and figures connected to Al-Qaeda, and Al Taqwa founder and director Ahmed Idriss Nasreddin, who previously worked for the Bin Laden Group.
Bank Al-Taqwa is connected to another Islamic banking entity in Europe suspected of terrorism, Al Rajhi Banking and Investment Corporation (which is headquartered in Saudi Arabia and operates an office in London). Suleiman Abdel Aziz Al Rajhi, chairman of Al Rajhi’s board of directors, is believed to have funded Al-Qaeda early on, and US officials allege he transferred over $20 million to Al-Taqwa through his network of fraudulent US-based non-profit organizations. Al Rajhi also worked for Bank Al-Taqwa.
At least three other British shari’a advisors sit on the European Council for Fatwa and Research with Al-Qaradawi and two others possess potential connections to Islamist entities, yet Chancellor Gordon Brown continues to promote the UK as a hub for Islamic banking.

Most people simply save in

Most people simply save in regular easy access accounts. However, if you have a lump sum then saving it in IBB’s fixed term deposit account is ideal; it’s with an organisation that operates on a Sharia’a compliant and ethical basis and provides a stable alternative to conventional savings.
rent a car

In the name of Merciful God, we introduce islamic banking

From my View, islamic banking was a need for Muslims...

it should be noted that it is my viewport,  and i am speaking what i intercept from all this situations... especially when the roots of the idea connects itself with traditional Jihadis and one and only "Tablighi Jammat"....

afterall when west is making Banking rules strick... they are strucked now. and despirate to find a way to tackle the money transfer problems..... now they have a Answer.. a smooth way of fund transfer without any intervention from kufirs...

Are you a Muslim?  ---  Yes

do you abide sharia rules? --- Yes

are you interested in serving for the cause of Allah ? --- Yes

do you seek a oppurtunity to earn salvation by slaughtering kufirs ? --- Yes

do you think west economic institution should be brought  down ? --- Yes

do you have more better ideas to serve for the cause of Islam.. then Islamic Banking welcomes you.. we give you a chance to make your dreams come true.. then we will finance you. Is it a plan to build a Islamic complex(anyways they live like that, 4 men in one room .. or even more) or a mega mosque project or a  studied abroad ( now also funding education in pakistani Madarssa's). we will support you... Funds available right in your neighbourhood...

contact your Imam / Islamic Bank for More information.

In the name of Merciful G-D...

we are also offering one and only "Punktesammlen" scheme... together we can brought the west down, this way or that way.....if you have a great score card from your mosque. or you already have served for us, then we have special "" schemes for you. have extra profits from us. In a hope to bring the west financial institute down, we are introducing one and only Banking Jihad... Banking in islamic way..... its Islamic banking....Its a news revolution from new generation salafi Muslims.


#... its my viewport, so its not balanced... other half can be asked from your nearest Imam... they will tell you all profit.


As long as Islamic banking and financial services adhere to the relevant regulations of the European Union and its member states, and treat their clients equally, the free market should decide whether or not Shari'a banking is a viable option. If Islamic banks are more costly and less efficient than secular banks, the latter are free to capitalise (no pun intended) on this fact through advertising. Naturally, the executive management and board of directors of these banks cannot contain criminals and must be held to the same rules and accountability of secular banks.

Islamic banking is not a prelude to further Islamisation any more than Mercedes-Benz, BMW and Volkswagen imports are an attempt at Germanisation.

Purpose of Islamic banking

The Islamist Bank of Britain has some information on sharia banking.  The reasons that they state for needing such an institution are interesting.


From the Principles:

 "The term Sharia'a refers to Islamic law as revealed in the Qur'an and through the example of the Prophet Muhammad (peace be upon him).
The authority of Sharia'a is drawn first and foremost from the specific guidance laid down in the Qur'an."

From the FAQ:

"Islamic Bank of Britain currently has £14 million in start-up capital which were raised by founder shareholders both in the UK and in the Gulf. We plan to increase this amount substantially through an Initial Public Offering in the UK and by another Private Placement in the Middle East, by which we intend to raise between £40-50million ...."

Also, FAQ:

"Under EEA (European Economic Area) legislation we should, after at least two years of satisfactory operation in the UK, be able to extend our operation into other parts of the European Union. France and Germany are countries of specific interest due to the number of Muslims resident in these countries. Our ability to commence operations there will be facilitated by the business model we have developed and which is capable of easy transportation or extension. "


My impressions after viewing the site are in a post I did related to the subject of this article (A portion of them follow):

"My impression is that there is such small difference likely to exist, as a practical matter, between Sharia banking and regular banking that the structure is designed to prevent an excuse among Islamists for engaging in banking and business with non-sharia and non-Islamist banks and to set up a vehicle to allow Sharia to become accepted by the public until it is considered harmless and of no dangerous consequence.

That it is designed for multiple purposes, including the spread of sharia to areas not presently under it's influence, is admitted and apparent. Such a base, once established, can operate freely (under the radar, when needed), in many avenues of assistence and cover."

More stealth jihad

 Well that's downright depressing.  Oh and those clerics know exactly what they are doing.  They are either 'true believers' or know exactly that 'islamic finance' is a fraud.  I read an interesting article about those Wall St. financiers and British financiers love the fees they get for producing these phony sharia compliant finance vehicles.  Several of them said they knew it was a fraud, but the money was great, so who cares. 


"That's right, I said it"

Doctrine versus common sense

Capital is scarce and, therefore, has a 'price', i.e. it is not 'free'.  Whether we call that price "interest", or something else, that is not really important.  What is important from an economic perspective is that scarcity involves a 'price' (or cost).  This is like the law of gravity, it is a fact-of-life, it is a 'positive' statement, i.e. it is about what 'is', as opposed to a normative statement, which is about what we 'want' to be.  

How a price level, any price level (including the one for capital), gets determined depends on 'market conditions'.   Generally, the more competitive and 'transparent' a market is, the more 'efficient' it will be, i.e. the better it will be able to match the wishes and needs of buyers and sellers (of capital, in this case).        

Whether a price (or interest rate) is "usurous' ( a loaded, normative, moralistic term) or not, will depend on whether anybody is in a position to 'exploit' noncompetitive market conditions.  For instance, a monopolist could charge almost any price he wants if there is a 'desperate' need on the other side of the 'market'.  The proper answer to that problem is NOT to deny that the product (capital in this case) is scarce, but rather to ensure competitive market conditions.   Which is what central banks and governmental regulatory bodies in modern developed economies generally try to do (or at least ought to try to do).

Because islamists are mentally hung up on the word "interest", they must seek ways around the problem of capital scarcity by devising complicated financial 'constructs'.  Their mistake is to focus on the word "interest", instead of on the more important question of underlying market conditions.  In doing so, they do not promote transparency on the market, but rather the opposite.   This does not promote efficiency in the economy.  It almost certainly does not promote 'justice' either, because the resulting 'prices' will be formed in less transparent markets.