Bank of England paves the path for Islam-friendly finance products


The Bank of England has become the first major Western central bank to embrace Islam-compliant deposit facilities, as Great Britain aims to pitch London as the principal international center for Islamic finance.Business 2016 - 3 pic

Born in its modern form in the 1970s, Islamic finance – which obeys religious principles such as bans on interest payments – has rapidly expanded over the past decade and there is now more than $2 trillion in Islamic financial assets.

Joining other central banks in the Middle East and Asia, the BoE is trying to allow Britain’s five Islamic banks to access an equivalent to its deposit facility, which normally pays interest.

Britain became the first Western country to issue Islamic bonds in 2014 and the BoE last year became the second Western regulator to join the Islamic Financial Services Board, one of the main standard-setting bodies for Islamic finance.


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