Ethical Banking for Everyone - Banking you can believe in - Al Rayan Bank
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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
What is Islamic banking? world engage with the financial system in a
way consistent with ethical, Sharia principles.
According to the British government, global
Al Rayan Bank’s ethical
Islamic investments have soared by 150% since banking credentials
2006 and were expected to be worth £1.3
How does it work? Does it offer the same facilities trillion in 2015.
Al Rayan Bank has been recognised as an
as the conventional banking system? Why is it ethical alternative to conventional banks
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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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)
Murabaha (special type of sale, cost
Lower risk banking
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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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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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
benchmarks for financing. This allows Islamic
Q. If I buy a home with a HPP, Q. Aren’t HPPs more expensive 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 a number of factors, such as the condition of
nor the most expensive in the market. Instead
the property and location; so rent charged for
they do so and are there any
conventional mortgage is that the lending/ of competing purely on price, the Bank’s
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
costs, such as large administration fees and By benchmarking against recognisable party, with a hidden intention to create a loss
1. With a HPP, of say 20 years, Al Rayan Bank for the partner.
early settlement charges, it can substantially conventional indices, an Islamic bank is neither
and the customer buy the property jointly.
increase the overall cost to the customer. using interest in its products nor borrowing
The customer then has 20 years to buy the Under the Al Rayan Bank HPP the customer
Al Rayan Bank’s HPPs are different. As an money from a conventional lender, it is simply
Bank’s share for the same initial purchase has the right to request the sale of the
Islamic bank, the Bank’s administration fees using a permitted method to offer better value
price. This is based on the Diminishing property at any time, without incurring
cannot be arbitrarily high and unjustifiable. to its customers by pricing products that are in
Musharaka (diminishing partnership) any penalties. The Bank will, in normal
All charges must be fair and reflective of the line with the local market.
principle of Islamic finance. circumstances, agree to sell. Any profit made
actual cost/effort required for the Bank to
undertake the activity. Additionally, should from the sale will go entirely to the customer.
2. At the time of completing the joint Al Rayan Bank will forgo its share in any profit
purchase, the customer will live in the a customer wish to settle their finance early,
they can do so at any time without penalty, made from the sale.
property even though a large share of it is
owned by the Bank. Therefore, until the even during a fixed rental rate period.
However, sometimes a negative equity
customer becomes the full owner, they will situation may arise when the sale price is
lease the portion of the property still owned With the introduction of the UK’s first
Home Purchase Plan to be backed by the lower than the initial purchase price. In this
by Al Rayan Bank and pay a monthly rental instance, since the sale is resulting in a loss,
to the Bank. This is based on the Islamic Government’s Help to Buy: HPP guarantee
scheme, HPPs are available to customers with the Bank, as a partner in the property, has
financing principles of Ijara (leasing). the right, under Sharia, to refuse the sale.
a 10% deposit, meaning that Sharia compliant
home finance is now available to customers Nevertheless, if the customer has special
When all acquisition payments have been circumstances and really needs to sell, they
made and the finance has been settled, who can afford the payments on home
finance, but do not a have a very large can purchase the Bank’s share for the same
ownership of the property transfers fully to initial purchase price. They may then sell the
the customer and they now own deposit saved.
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.
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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 When the customer decides to purchase a house
therefore affect the customer’s long term
customer pays the Stamp Duty at the outset Q. The HPP involves two contracts.
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 the property and become partners. As the
With an Al Rayan Bank HPP, the Bank appoints interdependent or to have ‘two customer wants to live in the property, they will
Government acted to end the double stamp
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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Ethical Islamic banks are guided
investment: by an independent ethics
committee, known as
a transparent a Sharia Supervisory
approach to Committee (SSC).
finance The SSC reviews every product that an
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
cannot be from businesses that are considered
Sheikh Dr Abdul Sattar Abu Ghuddah,
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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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
is not suitable for Muslims. By choosing an independent, national survey looking at alone. The same survey showed that a majority
distribution, fair trading, prudent
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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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
bank accounts or ethical investments.
money or house.
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.
This means that Islamic banks, such as Al
very competitive expected profit rates, by Q. Why are Sharia Scholars Q. Is it permissible under Sharia
Rayan Bank, do not conduct business unless
the personal, high quality service and by the 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? compliant savings product is called ‘fixed term’
all FTD customers who joined the Bank were
a higher element of risk to a bank, and the and not ‘fixed return’. It is usually offered
non-Muslims. A. Sharia Scholars are appointed by the
assets and deposits of its customers. 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 with the deposits. The ‘Fixed’ element relates
proved to be an ethical and resilient alternative Sharia compliant? 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
financial crisis. A. Al Rayan Bank ensures that its activities 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
through its relationship with its parent ensure that the rules are followed as closely external auditor, who carries out work for an These savings products do not offer a fixed
company, Masraf Al Rayan Q.S.C. (MAR), the as possible, Al Rayan Bank has a Sharia organisation. return in the same way that conventional
second largest Islamic bank in Qatar by market Compliance Department and is overseen by a
banks that pay interest do. Under Sharia,
value. This gives Al Rayan Bank financial separate independent body called the Sharia This is permissible according to Sharia and the the bank cannot guarantee a rate of return,
stability as well as access to expertise and Supervisory Committee (SSC). 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
As an UK bank, Al Rayan Bank is authorised by and its application within modern day Islamic to it carrying out its business. for the customer in many ways, so that the
the Prudential Regulation Authority (PRA) and financial institutions.
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.
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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
Musharaka person’s capital and them both sharing the risk
Purchase Plans (HPP), Buy To Let Purchase
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
Qard to the bank, which is used by the Bank for
Current Accounts.
investment and other purposes. It is paid back
to customers, in full, on demand.
Riba Interest or usury. Prohibited in Islam.
Terminology A Sukuk has similar characteristics to a
conventional bond (money invested by an
Commonly used by governments and
institutions in the GCC and Middle
individual with an institution) with the key
Sukuk East. In 2012 Britain became the first
On the opposite page, you will find an overview difference being that it is backed by tangible
country outside the Islamic world to issue
assets such as property and is based on
of some of the key terminology used in Islamic Islamic finance principles.
sovereign Sukuk.
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 19Al 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
and property financing. provides banking, financial and
The Bank was also the first to introduce Al Rayan Bank prides itself on being a
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
institutional and business banking products communities in London, Birmingham, Regulation Authority and regulated by
the Financial Conduct Authority and the licensed by Qatar Central Bank. It is
and services, including Commercial Manchester and Leicester. It is expanding its
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
three ethical current account providers. 0800 4086 407. products to a market which has great
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.
alrayanbank.co.uk Banking you can believe in
20 21Savings
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 Current Account For customers that want the services offered by a current account, including debit
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
Let Purchase Plan own home, or a buy to let investment.
the ‘Best Buy’ tables of online comparison
(BTLPP) websites.
Home Purchase Plan For UK non-domiciled and non-resident Gulf Co-operation Council
(GCC) customers looking for Sharia compliant, ethical home finance,
Premier (HPPP)
Further information
for residential or investment purposes.
Commercial Property For businesses looking for commercial property finance that is Sharia
compliant, ethical and can be tailored to their individual needs.
Finance To find out more about these or other products offered by Al Rayan Bank, visit
www.alrayanbank.co.uk
alrayanbank.co.uk Banking you can believe in
22 23Want 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
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