First UK Shariah compliant capital protected savings product
- Story by: Gemma Westacott
- Magazine: FTAdviser
- Published Thursday , June 12, 2008
The alburaq savings plan has a minimum investment of £500 and has been developed and will be marketed by alburaq in partnership with the Bank of Ireland.
Savers will be able to deposit funds with the Bank of Ireland for five years in an account structured following the Islamic principles of Wakala.
At maturity they will receive their initial capital back, together with 100 per cent of any gain in the performance of a basket of 20 shares in global companies selected from the Dow Jones Islamic Titans 100 Index.
Keith Leach, Head of alburaq at ABC International Bank, said: “Over the past few years the UK has seen an increase in the availability of Islamic home finance products but there remain very few options for Muslims wishing to save money in accordance with their religious beliefs.
“This new account is also an easy way for Muslim savers to gain exposure to the equity markets, in a secure way.
Leach added: “While it is considered permissible within Islam for Muslims to own shares, there are restrictions on the type of companies that are considered allowable.
“The companies must not be over reliant on debt nor must they be engaged in activities that conflict with the principles of Shariah. Many of these principles will be similar to those required by ethical investors.”