Sharia finance – how Islamic products differ from traditional banking in Australia
For most Australians, the world of Islamic finance is a closed book however given that some estimates suggest that the sector has a growth rate of 15-20% and a total value of some $2tn it is an area that is worth taking a look at.
Whilst modern Islamic finance services have taken off since the end of the twentieth century, the guiding principles behind this form of finance have been around since the foundation of Islam, and these mandate that any product must comply with Sharia law.
The central bank of Australia has finally decided to grant a license to the first Islamic bank in the country. The entire process had been delayed due to the Covid-19 pandemic, but the bank is due to open in early 2021. The Islamic Bank of Australia (IBA) is going to offer Sharia-compliant services to both individuals and small/medium business enterprises.
The bank would operate online and have one physical premise in Sydney, which will also act as their headquarters. Their goal is to keep the operational costs to a minimum and focus on offering cloud-based services to the customers.
The CEO, Dean Gillespie has said that they have a list of customers who are waiting for a long time for such services. The list includes non-muslim customers as well who have been looking for financial services that operate with strong ethical standards.
The $14.6 million seed capital was born equally by Muslim investors based in Australia and the UAE. The bank has plans to acquire more capital investments from Asia and the Middle Eastern countries.
Courtesy by :https://www.australiantimes.co.uk/