Chapter 32United KingdomUnlocking Opportunities in Islamic Finance
Fara Mohammad
Legal Consultant
Islamic finance is growing rapidly across the world, and the United Kingdom is indeed no stranger to this sector. Islamic finance in the United Kingdom began in the 1980s with the existence of Shari'ah-compliant short-term transactions in the London financial markets and the emergence of significant commodity murabahah transactions through the London Metal Exchange. Banks in London began providing overnight deposit facilities and this provided a source of liquidity to entities and institutions in the Middle East. This created significant interactions between British bankers and their clients in the Middle East and paved the way for the early development of Islamic finance in the United Kingdom.
The United Kingdom at present has one of the most advanced Islamic financial markets in the Western world and is a key destination for foreign Shari'ah-compliant institutions. Its unrivalled concentration of capital and capabilities means that more overseas financial institutions and investors choose to do Islamic finance business in the United Kingdom. There are six fully Shari'ah-compliant banks in the United Kingdom: Gatehouse Bank, the Bank of London and the Middle East (BLME), the European Islamic Investment Bank, Qatar Islamic Bank (UK), the Islamic Bank of Britain, and Abu Dhabi Islamic Bank.
The Islamic Bank of Britain operates in the retail environment, and the other institutions ...
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