The steady rise of Islamic finance

By Emily Buchanan and Bhasker Solanki

London has become one of the biggest centres for Islamic finance in the world, with five Islamic banks, and many others in the high street offering Islamic financial products, or "windows" as they are known.

The growth of Islamic finance has been an unexpected outcome of the attacks on the World Trade Center of 11 September 2001.

Islamic finance is based on rules from Islam's holy texts - the Koran. Scholars claim the fundamental difference to conventional banking is that Islamic finance is more ethical.

First it bans any form of "riba" or interest, preventing consumers being exploited by high rates of borrowing.

'Sinful'

Secondly, it regards speculative trading as sinful. One of the world's leading experts on Islamic finance, Sheikh Hussain Hassan, argues the whole crisis in Western banking could have been avoided if these basic sharia principles had been followed.

He said: "$600 trillion were wasted on options, futures and derivatives, all gambling. Sharia prohibited these kind of risks 14 centuries back."

Some Muslims regard ordinary mortgages as sinful. The idea is for the lender and the borrower to share the risk. There are now more products on the market which help Muslims buy a house without paying interest.

The most common form of Islamic home purchase loan works like this: When a couple wants to buy a house, instead of borrowing the money, the Islamic bank buys 80% of the house for them.

The couple puts down a deposit for the other 20% and then pays the bank rent, plus regular portions of the capital. During the fixed period, ownership gradually passes from the bank to the buyer.

But if the borrower loses his job and defaults on the payments, under sharia law it is very difficult for the family to be thrown out of their home, as that would be seen as a creditor exploiting a debtor.

These interest-avoiding transactions can work on a bigger scale as well.

The old Chelsea Barracks in London was bought by the Qatari government for nearly £1bn - the biggest residential property deal in the UK.

The entire transaction was done under sharia pinciples, with contracts drawn up by lawyers at Norton Rose.

Farmida Bi, one of the law firm's partners, explained that London has attracted this kind of investment because the British government wooed Islamic money in the wake of 9/11, at the expense of the US.

"It was really September 11th that made being a Muslim a political statement and not just a matter of personal faith," she said.

"And with the Patriot Act, which made investments in the US difficult for many Islamic investors, there was a significant increase in Islamic investors choosing to invest in Islamic institutions and Islamic products."

So while groups in the US were investigating terrorist connections with Islamic banks, Muslim investors pulled their money out of America.

Some of the money got diverted to London, which had traditionally been a banking centre. The British government then helped further by changing regulations to give sharia-compliant funds a level playing field with conventional ones.

A spokesperson for the Financial Services Authority, the body which regulates UK financial services, said: "We have a policy of no obstacles and no special favours towards Islamic banking, or indeed any new financial company."

The desire of British Muslim consumers to affirm their identity is also leading to a growth in new consumer services.

Salaam Insurance has launched Europe's first sharia-compliant car insurance aimed at Britain's 700,000 Muslim drivers.

Bradley Brandon-Cross, its non-Muslim chief executive, finds most Muslims do not yet understand the profit and loss sharing principles of "takaful" that it is based on.

"There's clearly an education campaign we are undertaking for British Muslims, to help them understand what Islamic finance is and what it means for them," he said.

Critics say the Islamic character of the products is merely window dressing to lure in Muslim customers.

And others argue the scholars who authorise them are a narrow group whom financial institutions choose to support their new services.

But this scepticism is unlikely to halt the inexorable growth of Islamic finance - as big investors and growing numbers of Muslim consumers demand it.

Eid ul Fitar, Religious Fesitval of the Muslims

The Eid ul Fitar is a religious festival celebrated by Muslims. It marks the end of Ramadan and celebrated on the starting day of Shawaal as it marks the tenth month of the Islamic Calendar. For Muslims, Eid ul Fitar is a joyous day since it is the best time for them to offer thanksgiving. As a true Thanksgiving Day, Muslims show appreciation to Allah for their opportunities of life, strength, and good health. They also give thanks to Allah for the fulfillment of their obligation such as good deeds and fasting during the blessed month of Ramadan.


The name of Eid ul Fitar is derived from two Arabic words, “Eid” and “Fitr”. Eid means festivity while Fitr refers to charity or nature. This religious festival is an entire day celebration for Muslims. It is often called as the “Smaller Eid” since the “Greater Eid” lasts for four days. During festival, Muslims are required to complete their fasting on the last day of Ramadan in accordance to their Holy Book, the Quran. The “Takbir” is also recited by Muslims all throughout the Eid period.


The common greetings during the Eid ul Fitar festival are the Arabic terms of “Id sa id” or Happy Eid, and “Id Mubarak” or Blessed Eid. Apparently, most Muslim countries have their own greetings based on their local traditions and language.


At the start of Eid ul Fitar festival, Muslims wake up early and have small breakfast before attending a special Eid prayer called as “salah”. Salah is performed in flock at mosques or open places such as squares and fields. Muslims are persuaded to wear their best clothes for the occasion. The Eid prayer is followed by a sermon known as “khutbah”, and a plea asking for help, mercy, and forgiveness for all living things in the world. The sermon instructs the Muslims to do rituals of Eid, such as the “zakat”. After the prayers, Muslims visit their acquaintance, friends, relatives as well as the graveyards of their loved ones who died.

Marriage in Islam

Marriage in Islam
September 21, 1:19 PMBoston Muslim Women's ExaminerBatul Juma



In Islam, marriage is a simple, legal contract between a man and a woman to live together as husband and wife.

A Muslim girl cannot be forced to marry against her will. Parents may suggest a suitable man for her but the choice is hers.

Marriage is strongly encouraged in Islam. It is both a legal agreement and a sacred bond. Allah has commanded in the Holy Quran: "Get the singles among you married as well as those who are fit for marriage among your male slaves and female slaves. If they are poor, Allah will make them free from want out of His grace: for Allah has boundless resources and is All-Knowing (24:32)." "And of His signs is that He created for you mates from among yourselves that you may find comfort with them, and He planted love and mercy for each other in your hearts; surely, there are signs in this for those who think about it (30:21)."

A woman has the same right to own property, earn wealth, and spend it as a man. A woman's wealth does not become the property of her husband after marriage or divorce. Nor is she expected to change her last name after marriage. Husbands and wives are protectors of each other, equal partners, and best of friends; remaining faithful to one another. The husband is the provider. He is responsible for the family. He fulfills his duties with consultation and kindness. Divorce is permitted in Islam but only as a last resort; although it is not common in Muslim families. In such cases, women are givennpriority in the custody of young children and the father is required to provide child support.

Prophet Muhammad, peace be upon him, has said: "The best among the believers is he who is best in manner and kindest to his wife."