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UK's first Shariah compliant capital protected savings product launched

12/ 6/2008

PROVIDER of Islamic home finance, alburaq has today launched the UK’s first retail Shariah compliant alternative to a guaranteed equity bond.

With a minimum investment of just £500, the alburaq savings plan provides a new way for those wishing to invest in accordance with their faith.

It will provide savers easy exposure to potentially unlimited returns linked to shares in major companies, all with the added comfort of capital protection and Shariah compliance.

The product has been developed and will be marketed by alburaq and is offered in partnership with the Bank of Ireland who has a long history of providing guaranteed equity bonds to UK consumers.

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 savers will receive their initial capital back together with 100% 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: "alburaq is very excited to be the first to bring a Shariah compliant capital protected product to the retail market in the UK. 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. 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."

Des Crowley, Chief Executive of Bank of Ireland UK Financial Services, added: "Bank of Ireland is delighted to be involved with alburaq in bringing to market the alburaq Savings Plan. This is a highly innovative product, the first of its kind and directly addresses the saving needs of the Muslim Community.

"We have been working with alburaq for four years providing Islamic Home Finance and today’s news should be seen as the next stage in our development of Shariah compliant products."

Customers can obtain further information by contacting the alburaq helpline on 0845 850 0786 or by visiting the website www.alburaq.co.uk