Diversification of Islamic Financial Insturments
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Table 78: Conventional Banks in UK Offering Shariah Compliant Services
1. ABC International Bank
2. Ahli United Bank
3. Bank of Ireland
4. Barclays
5. BNP Paribas
6. Bristol & West
7. Citi Group
8. Deutsche Bank
9. Europe Arab Bank
10. IBJ International London
11. J Aron & Co
12. Lloyd’s Banking Group
13. Royal Bank of Scotland
14. Standard Chartered
15. UBS (United Bank Scotland)
16. United National Bank
Source: Created by Author
Financial Instruments in Islamic Banks
As elaborated in the previous section the Islamic banking industry in UK comprises of three
categories which in 2016 amounted to nearly USD 3.5 billion in assets.
1. One fully Shariah compliant Islamic Bank with retail banking.
2. 4 fully Shariah Compliant wholesale and Investment Banks
3. 16 banks with window operations or partial Shariah compliant instruments in their
portfolios.
The instruments that are on the offer by these banks spread across multiple different legal
contracts, and are all endorsed by their respective Shariah Boards. The broader classification
of the instruments available in UK can be under three heads; retail banking, corporate banking
and private banking.
The following section discusses the legal contracts that are used by the UK banks under two
categories for standardization Deposit mobilization, and Financing.
Deposit Mobilization Products
Mudharabah: The products that are offered under retail banking include primarily Savings
accounts which are based on the principles of Mudharaba and designed specifically to meet the
requirements of customers who authorize the bank to invest their cash deposits. These
accounts come both in the form of demand and time deposits. These deposits are mobilized
and a deposit pool is created which is further invested in a Shariah compliant and ethical.
Profit sharing by the bank with the customers is variant in terms of different nature of the
account. In some accounts the profit is announced and shared monthly, and in some cases on a
quarterly or yearly basis.