Banking you can believe in Ethical Banking for Everyone
Sharia compliant finance alrayanbank.co.uk Ethical banking for everyone Islamic banking provides Muslims with a In the UK, Government support for the Islamic variety of financial products that help their finance sector has been instrumental in helping money work harder and allow them to finance the industry to flourish. In 2013, the UK residential and business property in line with became the first non-Muslim country to host their faith. However, with its underlying the World Islamic Economic Forum, with British principles of equitable distribution for all, ideals Prime Minister, David Cameron announcing his of fair trading, judicious spending of wealth ambitions for London to become the “one of and the well-being of the community as a the great capitals of Islamic finance”. He also whole, Islamic finance also presents an ethical revealed plans for a new Islamic index on the banking alternative for non-Muslims. London Stock Exchange (LSE). Consequently, in 2014, the UK became the first western country The evolution of Islamic finance to issue a Sukuk, or Islamic bond, which raised £200 million. Although a fairly recent development in the West, Islamic finance is in fact as old as Islam According to research from CityUK, Britain has itself. From its humble beginnings in the 22 banks offering Islamic financial products and seventh century to its position today as one of services, more than any other Western country. the fastest growing areas of the global financial Of these, Al Rayan Bank, formerly known as services market, it has remained true to the Islamic Bank of Britain, is the oldest and largest recognised principles of Islamic law, or Sharia. wholly Sharia compliant retail bank.
Islamic finance plays an essential role in helping individuals and institutions across the world engage with the financial system in a What is Islamic banking? way consistent with ethical, Sharia principles. Al Rayan Bank’s ethical According to the British government, global Islamic investments have soared by 150% since banking credentials 2006 and were expected to be worth £1.3 trillion in 2015. How does it work? Does it offer the same facilities Al Rayan Bank has been recognised as an ethical alternative to conventional banks as the conventional banking system? Why is it by the Move Your Money campaign and gaining popularity, year on year, with customers in Ethical Consumer magazine, which places the Bank in the top ten of ethical the UK, both Muslim and non-Muslim? current account providers. Al Rayan Bank is also an accredited ‘Living This guide will seek to answer all of these questions and more, and Wage Employer’, voluntarily opting to demonstrate how Islamic banking offers a different approach to finance. pay their employees a ‘Living Wage’ which is significantly higher than the current minimum wage and the new compulsory National Living Wage, introduced in 2016. In addition, the Bank was accredited as an ‘Investors in People’ organisation in 2015, demonstrating the signs of a great employer with a clear commitment to sustainability.
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2 3 How Islamic banking is different How it works in practice to conventional finance Ethical Savings: profit not interest
Islamic banking is designed to enable paid on Islamic savings or current accounts, An Islamic bank does not pay interest to its savers. Instead, it invests its customers’ deposits into Sharia society to conduct its finances in a way that or charged on Islamic finance products. compliant and ethical trading activities, with the intention of generating a profit, which it then shares with is considered fair and ethical. It operates Instead, money must be used in a its customers. It is for this reason that Islamic banks do not advertise interest rates; instead they predict completely without interest, which is productive way by generating wealth expected returns, or expected profit rates, for customers. believed by Muslims to promote inequity (i.e. profit) through legitimate trade and in financial transactions which can lead investment, which involves an element of Expected profits are not guaranteed in the same way that conventional interest is, therefore there may to social inequality and injustice. Islamic risk. Savings accounts therefore earn an be an element of risk. However, customers can be assured by the fact that since Al Rayan Bank was finance also operates without speculation ‘expected profit’. established in 2004, it has always paid its expected (or target) profit rates, and in some cases, it has paid and uncertainty; instead it is founded upon more to its customers. the principles of trade, entrepreneurship Speculation is not permitted in Islamic and risk-sharing. finance and activities must be backed by From December 2012 to January 2016, Al Rayan Bank consistently offered at least one savings account tangible, underlying assets. Conventional with the UK’s highest rate of return, according to the Moneyfacts best buy tables. This structure creates a more equitable financial instruments, for example short- relationship between the Islamic bank and selling, futures and options contracts and its customer, and a more stable foundation derivatives, are not asset-backed and are for economic activity for the individual, therefore not permitted. This is because organisations and society as a whole. they are considered to create risks to customers’ assets and deposits that do not On a macro level, it makes Islamic finance promote the financial well-being of the more stable. For example, it was better parties involved, or society as a whole. protected from the recent global banking From December 2012 to January 2016, crisis than conventional banks because The financial products that Islamic banks Al Rayan Bank consistently offered its method of banking, where investment use are developed from trade-based at least one savings account with must be in tangible assets and not financial principles that allow customers to conduct the UK’s highest rate of return, instruments based on speculation, did their finances in a Sharia compliant, according to the Moneyfacts best buy not create the ‘toxic’ assets that were ethical way. tables. recognised as a root cause of the crisis. On a micro level, many argue that it makes These include: Islamic finance less risky for customers, Ijara (leasing) regardless of their faith. The answer to how Musharaka (partnership) lies in its prudent approach to banking. Wakala (agency agreement) Mudaraba (profit sharing contract) Lower risk banking Murabaha (special type of sale, cost plus mark-up) Central to Islamic finance is the fact that money itself has no intrinsic value; it is You can find more information about simply a medium of exchange. Making a these, and other terms used in Islamic profit from lending or receiving money is finance here. not allowed. Therefore interest, or riba as it www.alrayanbank.co.uk/useful-info- is known, is not permitted, for individuals tools/islamic-finance/a-to-z or banks. This means that interest is not
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4 5 Ethical Savings FAQs
Al Rayan Bank is often asked questions about its products, what makes them Islamic and how they differ from conventional banking products, here is a selection of some of the most commonly asked questions:
Q. How do Islamic finance Q. Why do Islamic banks products such as savings advertise % rates for products accounts work? Will I be paid if they do not charge or pay interest? interest?
A. Al Rayan Bank, and other Islamic banks, A. As a UK bank, regulated by the will not pay interest to customers that open Prudential Regulation Authority (PRA) a savings account with them. However, it is and Financial Conduct Authority (FCA), permissible for customers to earn a profit Al Rayan Bank is required to display its which is generated from the deposits they charges in this way so that consumers make with their Islamic bank. can judge the value of what it offers and charges, versus others. Customers must be Al Rayan Bank’s savings accounts are able to compare Al Rayan Bank’s rates and based on Islamic finance principles and charges against what they would receive pay profits. For example, an Al Rayan Bank or be charged by conventional financial Fixed Term Deposit (FTD) Account is based institutions. on the Islamic financial principle of Wakala (agency agreement). Expressing the rental rate as a percentage of the charge, does not mean that it is Under the Wakala agreement, a customer converted into interest. It simply expresses deposits their savings with Al Rayan Bank how much rental Al Rayan Bank is charging and the Bank becomes their agent. Al the customer as a proportion of the Home finance: rent not interest Rayan Bank uses the cash deposit to invest property purchase price. It also allows the in Sharia compliant and ethical trading customer to compare this charge with Under the terms of a conventional mortgage, the Every month the customer makes a HPP payment, activities, such as property and relatively other providers in the market, including customer borrows money from a lender which is which has two elements: a rental payment to low risk metal trading, which generate a conventional mortgage companies, and then repaid with interest. However, a HPP uses the bank for the use of its share of the property, target profit for the customer over a fixed to make a decision on which product is the Islamic finance principles of co-ownership and an acquisition payment to buy the bank’s term. The Bank manages and monitors the most suitable for them. Whilst the Home (Diminishing Musharaka) with leasing (Ijara), and share in the property. Over an agreed term, the performance of the investments on a daily Purchase Plan (HPP) is Sharia compliant no interest is payable. Instead, the bank and the customer’s stake in the property grows and the basis to minimise the risk and ensure that and the conventional mortgage is not, the customer buy the property together, as partners. bank’s diminishes. At the end of the agreed term, the customer receives the projected target percentage rate is a common measuring when all acquisition payments have been made, (‘expected’) profit rate. tool that makes the two products Islamic finance does not use any interest-bearing ownership of the property transfers fully to comparable. products to finance customers’ properties. the customer. Instead, it uses its own funds, or the savings deposits of customers.
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6 7 Q. Why don’t Islamic banks use the rental market rate for Home Home Finance FAQs Purchase Plan products? A. Islamic banks use conventional indices, Here is a selection of questions about HPPs, which Al Rayan Bank is such as Bank of England Base Rate (BBR) or commonly asked: (London Interbank Offered Rate) LIBOR, to price their products as these are the most accurate, widely accepted and consistent Q. Aren’t HPPs more expensive benchmarks for financing. This allows Islamic Q. If I buy a home with a HPP, banks to meet the important Sharia criteria of will I be charged interest? compared to conventional ensuring consistency and avoiding uncertainty. mortgages? Q. If a customer of the HPP A. Al Rayan Bank has developed the If local rental rates were to be used as a Home Purchase Plan as a Sharia compliant A. A range of home finance products exist and benchmark, there would be too much wishes to sell a property during alternative to a conventional mortgage. The Al Rayan Bank is typically neither the cheapest variation. Rental rates fluctuate depending on a negative equity situation, can principle difference between a HPP and a nor the most expensive in the market. Instead a number of factors, such as the condition of they do so and are there any conventional mortgage is that the lending/ of competing purely on price, the Bank’s the property and location; so rent charged for borrowing relationship does not exist. For objective is to provide value to our customers a property in London would be three or four conditions surrounding this? this reason interest does not form part of the through innovative Sharia compliant products times more expensive than a similar property arrangement. and outstanding service. in some other parts of the UK. Consequently, A.The Al Rayan Bank HPP is based on the Islamic bank would not be able to offer a Diminishing Musharaka (Partnership) and Ijara As a Sharia compliant product, Al Rayan It is important to remember that many fair and consistent rental rate for its products. (Lease) agreements. One of the important Bank’s HPPs are based on joint ownership and conventional mortgage providers use low Not only is this against the Sharia but it would conditions for Musharaka, under Sharia, is that lease agreements arranged using two separate headline interest rates to grab attention but also be more costly for the customer. the partnership is formed with the objective of principles of Islamic finance: when you couple these with hidden extra making a profit. It cannot be formed, by either By benchmarking against recognisable party, with a hidden intention to create a loss 1. With a HPP, of say 20 years, Al Rayan Bank costs, such as large administration fees and conventional indices, an Islamic bank is neither for the partner. and the customer buy the property jointly. early settlement charges, it can substantially using interest in its products nor borrowing The customer then has 20 years to buy the increase the overall cost to the customer. money from a conventional lender, it is simply Under the Al Rayan Bank HPP the customer Bank’s share for the same initial purchase Al Rayan Bank’s HPPs are different. As an using a permitted method to offer better value has the right to request the sale of the price. This is based on the Diminishing Islamic bank, the Bank’s administration fees to its customers by pricing products that are in property at any time, without incurring Musharaka (diminishing partnership) cannot be arbitrarily high and unjustifiable. line with the local market. any penalties. The Bank will, in normal principle of Islamic finance. All charges must be fair and reflective of the actual cost/effort required for the Bank to circumstances, agree to sell. Any profit made from the sale will go entirely to the customer. 2. At the time of completing the joint undertake the activity. Additionally, should a customer wish to settle their finance early, Al Rayan Bank will forgo its share in any profit purchase, the customer will live in the made from the sale. property even though a large share of it is they can do so at any time without penalty, even during a fixed rental rate period. owned by the Bank. Therefore, until the However, sometimes a negative equity customer becomes the full owner, they will With the introduction of the UK’s first situation may arise when the sale price is lease the portion of the property still owned lower than the initial purchase price. In this by Al Rayan Bank and pay a monthly rental Home Purchase Plan to be backed by the Government’s Help to Buy: HPP guarantee instance, since the sale is resulting in a loss, to the Bank. This is based on the Islamic the Bank, as a partner in the property, has financing principles of Ijara (leasing). scheme, HPPs are available to customers with a 10% deposit, meaning that Sharia compliant the right, under Sharia, to refuse the sale. Nevertheless, if the customer has special When all acquisition payments have been home finance is now available to customers who can afford the payments on home circumstances and really needs to sell, they made and the finance has been settled, can purchase the Bank’s share for the same ownership of the property transfers fully to finance, but do not a have a very large deposit saved. initial purchase price. They may then sell the the customer and they now own property to a third party at any price they are their home outright, without having paid willing to take. This, however, may result in a any interest. loss for the customer. alrayanbank.co.uk Banking you can believe in
8 9 Q. Under a HPP contract the Q. Under a Under a HPP property is ‘owned’ by the bank. contract why does the customer If this is the case, as tenants why have to pay the Stamp Duty? do the occupiers have to pay for buildings insurance and general A. When a consumer buys a property in the UK, they automatically have to pay Stamp maintenance? Is this permissible? Duty, if applicable. Under the Al Rayan Bank HPP, the customer and the Bank jointly A. The Home Purchase Plan is a product purchase the property. However, the ultimate which enables the customer to buy their own owner will be the customer, after they have home in a Sharia compliant way, without bought the Bank’s share over a period of interest. The overall objective of the HPP, time. As such the Stamp Duty cost will also, therefore, is to allow the customer to purchase eventually, have to be passed to the customer. the property over a period of time, so that, ultimately, they become its owner. In order for Al Rayan Bank to be able to offer the HPP with a competitive monthly rental In order for an Islamic bank to be able to offer rate, it is more practical if the customer pays the HPP at a competitive rental rate, it does the Stamp Duty when the property is initially not take on the responsibility of maintenance purchased. Some Islamic banks do offer to and insurance as part of the Ijara agreement. share the costs when the property is first If the bank were responsible for carrying out bought. However, this results in a subsequent maintenance, procuring buildings insurance higher monthly rental rate to cover the Bank’s and the subsequent administration, the rental extra costs. Thus, with Al Rayan Bank the rate would need to be higher. This would customer pays the Stamp Duty at the outset Q. The HPP involves two contracts. When the customer decides to purchase a house therefore affect the customer’s long term of the joint purchase, in order to enjoy a lower in a Sharia compliant way, they approach Al Rayan objective of buying their home in a Sharia rental rate over the long term. However, isn’t it true that Sharia Bank to finance the house that they want to live compliant, and affordable, way. does not permit contracts to be in. The Bank and the customer jointly purchase It is interesting to note that in 2003 the UK interdependent or to have ‘two the property and become partners. As the With an Al Rayan Bank HPP, the Bank appoints Government acted to end the double stamp customer wants to live in the property, they will the customer as a Service Agent responsible duty incurred by customers buying their contracts in one’? need to lease the Bank’s share, and consequently for maintenance of the property and ensuring homes under the Murabaha Islamic finance the Bank and the customer sign the Ijara contract. that it is covered by appropriate insurance. principle. Under Murabaha purchases, the A. Sharia does not permit clauses in two contracts Therefore, these two contracts allow the customer This is permissible according to Sharia and Islamic bank buys the property, but on the which make them interdependent on each other, to purchase their home gradually, over a fixed is beneficial for the customer. It means the day of completion it is immediately sold on with a complicated outcome for the parties term, whilst also living in it. Bank can charge a lower rental rate that is to the customer at a higher price. This led concerned. This is not the case with an Al Rayan competitive with conventional banking and to the imposition of a double stamp duty. Bank HPP. When the Diminishing Musharaka contract ends, ultimately enables the customer to buy their However, this was eventually abolished by the as a result of the customer purchasing Al Rayan home without paying interest. Government to introduce a level-playing field The HPP from Al Rayan Bank is based on two Bank’s entire share of the property (or due to the for Islamic banks offering this type of home independent contracts, the outcome of which is sale of the property to a third party), the Ijara finance product. straightforward for both the customer and the contract expires, as the Bank no longer owns any Bank, i.e. it allows the customer to purchase their part of the property. home in a Sharia compliant way.
An Al Rayan Bank HPP is based on a joint partnership contract (Diminishing Musharaka) with its own set of clear rules, and the leasing contract (Ijara) with its own set of clear rules.
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10 11 Ethical Islamic banks are guided investment: by an independent ethics committee, known as a transparent a Sharia Supervisory approach to Committee (SSC). The SSC reviews every product that an finance Islamic bank provides, as well as how it operates and the way that it acts, to ensure that everything it does Islamic finance is designed to ensure a fair is consistent with Islamic values. outcome for all parties, by providing a way This influence helps to guarantee that for society to conduct economic activity in an ethical and socially responsible manner. Islamic an Islamic bank’s actions are not only banks share, more equally, the risks and returns concerned with the direct needs of the of trading activity with their customers. Bank, but also with the wider needs of society as a whole. The source of an Islamic bank’s funding, profits and business investments must be ethical. They Sheikh Dr Abdul Sattar Abu Ghuddah, cannot be from businesses that are considered unlawful under Sharia, i.e. companies that deal Sheikh Nizam Muhammed Saleh in interest, alcohol, gambling, pornography, Yaqoobi and Mufti Abdul Qadir speculation, tobacco, arms and other Barkatulla sit on the Al Rayan Bank commodities contrary to Islamic values. Sharia Supervisory Committee (SSC); together with the Bank’s Head of Sharia Compliance, they have decades of expertise in Islamic finance and Sharia.
In addition to this a Sharia Compliance Department ensures that the day- to-day activities of the Bank and its employees are in keeping with the principles of Islam.
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12 13 Who uses Islamic banking?
With its principles of equal As conventional banking is interest based, it When Al Rayan Bank commissioned an But Islamic banks do not appeal to Muslims distribution, fair trading, prudent is not suitable for Muslims. By choosing an independent, national survey looking at alone. The same survey showed that a majority Islamic bank, Muslims can save their money, British consumers’ (Muslim and non-Muslim) of non-Muslims say they consider Islamic spending and the well-being of the buy their homes and carry out their day to day understanding and attitudes towards Islamic finance appropriate in a modern western community, it is not surprising that banking in a Sharia compliant way. They can finance, they found that over one third – 36% society and one of the reasons for this is that an increasing number of people, rest assured that their money is working for - of all British Muslims use Islamic finance, Islamic finance is recognised as an alternative them, without compromising the principles of 9% of these exclusively so. A further 45% to conventional banks for consumers who are both Muslim and non-Muslim, their faith. of Muslims, who don’t currently use Sharia looking to make ethical investments with are turning to Islamic banking for compliant finance, are likely to consider doing their money. their finances. In the UK, there is a large and growing Muslim so in the future. population. Al Rayan Bank’s own analysis, conducted in 2012 with Experian, the global information services company, estimated that there are 1.53m Muslim adults in the UK, representing 3.1% of the UK population.
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14 15 Islamic Banking FAQs
Here are some additional questions, which help explain more about Al Rayan Bank, Islamic banking and its ethical investments. For further information, please visit the Al Rayan Bank website for a range of educational videos and animations.
Q. Is my money safe with Q. I’m not Muslim – can I still an Islamic bank? Unlike use an Islamic bank? conventional banks, Islamic A. Yes. Islamic finance adheres to the values of banks are quite new and small, Sharia, but it is not exclusive for Muslims, it is and I don’t want to risk losing my available to anyone who is interested in ethical money or house. bank accounts or ethical investments. People of all faiths, and none, bank with Al A. The Islamic banking system uses real Rayan Bank; they are attracted by the often trading activities backed with real assets. very competitive expected profit rates, by Q. Why are Sharia Scholars Q. Is it permissible under Sharia This means that Islamic banks, such as Al the personal, high quality service and by the Rayan Bank, do not conduct business unless paid a fee by an Islamic bank to quote a profit rate for Fixed ethical and relatively safe approach to banking they have an asset to allow the transaction that Islamic finance offers. for their work? Does this affect Term Deposit savings accounts? to be carried out. Islamic banks are also not permitted to use financial instruments that are their ‘independence’ and is it Al Rayan Bank estimates that in 2016, 94% of A. It is important to clarify that this Sharia based on speculation, which can introduce permissible? all FTD customers who joined the Bank were compliant savings product is called ‘fixed term’ a higher element of risk to a bank, and the non-Muslims. and not ‘fixed return’. It is usually offered assets and deposits of its customers. A. Sharia Scholars are appointed by the under the Islamic principle of Wakala (an shareholders of an Islamic bank as an agency agreement). With this product, the By following this asset-backed approach, Al independent committee. Their role is to ensure Islamic bank provides an expected profit rate Rayan Bank, and Islamic banking as a whole, is Q. How does Al Rayan Bank that the bank carries out all of its transactions over a set period of time as a ‘target’, based not exposed to the same risks as conventional ensure that its activities are in compliance with Sharia requirements. They on the investment activity it will undertake banks. This is why the Islamic finance industry are required to audit the bank’s work from Sharia compliant? with the deposits. The ‘Fixed’ element relates proved to be an ethical and resilient alternative a Sharia perspective and review the bank’s to the length of time the bank will undertake to conventional banking after the recent products. In return for the Scholars’ time the investment activity for the customer. For A. Al Rayan Bank ensures that its activities financial crisis. and effort they are entitled to remuneration. example, two years for the 24 Month Fixed are Sharia compliant by following Islamic This is no different than for any other Term Deposit Account. Al Rayan Bank offers security to its customers finance principles laid down in the Sharia. To trained professional, such as a solicitor or an ensure that the rules are followed as closely through its relationship with its parent external auditor, who carries out work for an These savings products do not offer a fixed as possible, Al Rayan Bank has a Sharia company, Masraf Al Rayan Q.S.C. (MAR), the organisation. return in the same way that conventional Compliance Department and is overseen by a second largest Islamic bank in Qatar by market banks that pay interest do. Under Sharia, separate independent body called the Sharia value. This gives Al Rayan Bank financial This is permissible according to Sharia and the the bank cannot guarantee a rate of return, Supervisory Committee (SSC). stability as well as access to expertise and fee paid to the scholars does not cloud their because with investment there is always an knowledge in order to continue developing its work or negate the impartiality of their advice. element of risk. range of Sharia compliant financial products. The SSC is comprised of Islamic scholars and It merely recognises the level of expertise the experts in the interpretation of Islamic law organisation is receiving, which is fundamental However, Islamic banks mitigate this risk and its application within modern day Islamic As an UK bank, Al Rayan Bank is authorised by to it carrying out its business. for the customer in many ways, so that the financial institutions. the Prudential Regulation Authority (PRA) and customer’s deposits and return do not suffer. regulated by the Financial Conduct Authority To date, Al Rayan Bank has always achieved and the PRA, and is a member of Financial the expected profit rate offered to Services Compensation Scheme. its customers. alrayanbank.co.uk Banking you can believe in
16 17 Term Definition Where it is used
A form of leasing. It involves a contract where Typically used in home finance products such the bank buys and then leases an item to a as Al Rayan Bank’s Home Purchase Plans Ijara customer for a specified rental, over a specific (HPP), Buy To Let Purchase Plans (BTLPP) and period. The duration of the lease, as well as the Commercial Property Finance (CPF). basis for rental, are set and agreed in advance.
An investment on your behalf by a more skilled Typically used in Islamic savings accounts, person. It takes the form of a contract between such as Al Rayan Bank’s Instant Access Mudaraba two parties - one who provides the funds and Savings Account, On Demand Savings the other who provides the expertise. The Account, Young Person’s Savings Account division of any profit is agreed in advance. and Young Person’s Notice Account.
A contract for purchase and re-sale for cost plus profit, which allows the customer to make This principle is used in Commercial Property Murabaha purchases without having to take out a loan Finance (CPF) and development finance. and pay interest.
This principle is typically used in home finance Partnership. A Musharaka contract involves products such as Al Rayan Bank’s Home a person placing their capital with another Purchase Plans (HPP), Buy To Let Purchase Musharaka person’s capital and them both sharing the risk Plans (BTLPP) and Commercial Property and reward. Finance (CPF).
An interest free loan. In essence, it means that a customer’s current account is a loan Al Rayan Bank uses this principle in its to the bank, which is used by the Bank for Qard Current Accounts. investment and other purposes. It is paid back to customers, in full, on demand.
Riba Interest or usury. Prohibited in Islam.
A Sukuk has similar characteristics to a Terminology Commonly used by governments and conventional bond (money invested by an institutions in the GCC and Middle individual with an institution) with the key East. In 2012 Britain became the first Sukuk difference being that it is backed by tangible On the opposite page, you will find an overview country outside the Islamic world to issue assets such as property and is based on sovereign Sukuk. of some of the key terminology used in Islamic Islamic finance principles. finance. For a comprehensive A to Z, please go to www.alrayanbank.co.uk This principle is used by Al Rayan Bank in all An agency contract, which usually includes in of its fixed term deposit savings accounts and Wakala its terms a fee for the expertise of the agent. Individual Savings Accounts (ISAs). It is also used in many of its notice savings accounts.
The third pillar of Islam. An obligatory contribution or tax which is prescribed by Islam Zakat on all Muslim adults having wealth above an exemption limit at a rate fixed by the Sharia.
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18 19 Al Rayan Bank
Whilst Al Rayan Bank offers products and Al Rayan Bank is the UK’s oldest and largest wholly Sharia compliant retail services that are designed in accordance with bank and has pioneered Islamic banking in the UK since it was founded in Sharia principles, it is an inclusive, ethical 2004. It offers the largest range of Sharia compliant retail financial products organisation and welcomes customers of all Masraf Al Rayan in the UK, including Islamic mortgage alternatives, Home Purchase Plans faiths looking for a bank with a transparent, prudent and community-focused approach. Al Rayan Bank’s parent company is (HPP) and Buy to Let Purchase Plans (BTLPP), ethical current accounts and The Bank has more than 60,000 customers, Masraf Al Rayan QSC (MAR), a savings accounts. both Muslim and non-Muslim, and has experienced year on year growth in deposits Qatar-based Islamic bank which provides banking, financial and The Bank was also the first to introduce Al Rayan Bank prides itself on being a and property financing. Sharia compliant business banking to customer-centric, aspirational bank. It is investment services. MAR was the UK, and now offers a wide range of located at the heart of the UK’s Muslim Al Rayan Bank is authorised by the Prudential founded in January 2006 and is Regulation Authority and regulated by institutional and business banking products communities in London, Birmingham, licensed by Qatar Central Bank. It is and services, including Commercial Manchester and Leicester. It is expanding its the Financial Conduct Authority and the Property Finance (CPF). Several of the presence across the UK through a growing Prudential Regulation Authority, and is a the second largest Islamic bank in Bank’s products remain unique in the UK number of regionally based agencies, member of Financial Services Compensation Qatar by market value. retail financial market. in locations such as Luton, Tooting and Scheme, the same as all UK regulated banks. Blackburn, with more set to follow. Its structure consists of three main In May 2015, Al Rayan Bank PLC was named by Global Finance magazine as one Whether in branch or agency, Al Rayan business divisions: Retail Banking, of the best Islamic banks in the world, in Bank employees are familiar faces amongst Wholesale Banking and Private its annual list of the World’s Best Islamic their local communities and are known Banking. Financial Institutions. This is the second personally by many of their customers. The time that Al Rayan Bank has won the Bank enjoys strong customer loyalty in the award, formerly winning under its previous areas it serves. In February 2014, MAR acquired name of Islamic Bank of Britain in 2009. Islamic Bank of Britain (IBB) to Al Rayan Bank is also available to customers expand its footprint in Western The Move Your Money Switching Scorecard 24/7 through its website and a UK-based, found Al Rayan Bank to be one of the top multilingual telephone banking facility: Europe and introduce its range of products to a market which has great three ethical current account providers. 0800 4086 407. The campaign compared more than 70 potential for continued growth. UK and global banking providers on five IBB was renamed Al Rayan Bank in key categories – customer service, honesty, culture, supporting the economy and In May 2015, Al Rayan Bank PLC was December 2014 to more closely align ethics. Al Rayan Bank received a ‘Good: named by Global Finance magazine as the UK bank with its parent. 74%’ Switch Score on the Move Your one of the best Islamic banks in the Money Switching Scorecard. world, in its annual list of the World’s Best Islamic Financial Institutions. This is The Bank was also rated as ‘good’ in the the second time that Al Rayan Bank has areas of customer service (received 100%), receiving few complaints, ombudsman won the award, formerly winning under referrals and PPI claims. The Bank also its previous name of Islamic Bank of achieved high rankings on its bonus policy Britain in 2009. and lack of risky investments.
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20 21 Savings
Instant access For customers that need the flexibility of instant withdrawals.
For customers that want a Sharia compliant, ethical savings account that provides Notice accounts a higher rate of profit but don’t need instant access to their money.
For customers who have at least £1,000 to invest, and want a Sharia compliant, Fixed Term Deposits ethical account to earn the highest rate of profit, but don’t need access to their money for a period of time.
For savers who want the benefits of Sharia compliant, ethical savings but don’t Cash ISAs want to pay tax on their returns. Al Rayan Bank currently offers Instant Access, Notice Access and Fixed Term Cash ISAs. Key Products Current Account The following is an overview of the key products that Al Rayan Bank offers. For more information about these products, or to find out more about other For customers that want the services offered by a current account, including debit Current Account products offered by the Bank, please visit the Al Rayan Bank website or call card and cheque book, international payments and instant access. 0800 40 86 414.
Home and Property Finance Al Rayan Bank’s Notice Cash ISA was the UK’s first Sharia compliant Cash ISA, and offers savers an ethical, tax-free way to save. Home Purchase Plan Since its launch, it has regularly featured on (HPP) and Buy to For customers that want Sharia compliant, ethical finance for their the ‘Best Buy’ tables of online comparison Let Purchase Plan own home, or a buy to let investment. (BTLPP) websites.
Home Purchase Plan For UK non-domiciled and non-resident Gulf Co-operation Council Premier (HPPP) (GCC) customers looking for Sharia compliant, ethical home finance, for residential or investment purposes. Further information Commercial Property For businesses looking for commercial property finance that is Sharia Finance compliant, ethical and can be tailored to their individual needs. To find out more about these or other products offered by Al Rayan Bank, visit www.alrayanbank.co.uk
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22 23 Want to know more General Data Protection about any of our Regulation (GDPR) products or services? Under the GDPR you have the right of access to your records. Should you wish to access this right please write to: Call us on: * Data Protection Officer, 0800 4083 084 Data Subject Access Requests, Monday to Friday, 9am to 7pm. Customer Care Team, Saturday, 9am to 1pm. Al Rayan Bank PLC, *Calls may be recorded for training and security purposes. 24a Calthorpe Road, Edgbaston, Visit: alrayanbank.co.uk Birmingham, B15 1RP Write to: Al Rayan Bank, PO Box 12461, Birmingham, B16 6AQ Membership of the Financial Services Compensation Scheme Or visit any of our branches. Al Rayan Bank PLC is a member of the Financial Services Compensation Scheme. This scheme may provide compensation, If we don’t get it right if we cannot meet our obligations. For example, in respect of deposits with a UK Al Rayan Bank PLC will endeavour to office, payments under the scheme are ensure that you receive the highest limited to 100% of the first £85,000 of a standard of service and that you are depositor’s total deposits with the bank. treated with courtesy at all times. If you are unhappy with any aspect of our Most depositors including individuals and service, we would like to know why. businesses are covered. The scheme covers deposits made with the offices of the bank For a copy of our Customer Care leaflet within the European Economic Area. dealing with our complaint handling procedures, please call our Customer Care team on 0800 4086 407.
Al Rayan Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Our firm reference number is 229148. Al Rayan Bank PLC is incorporated and registered in England and Wales. Registration No. 4483430. Registered office: 44 Hans Crescent, Knightsbridge, London, SW1X 0LZ. Banking you can believe in
EBE ARBV3 0518 FA ARBV3 0116