Published on : Thu, 17 Nov 2005 19:48GMT
by : Lucy Andrews

LONDON - HSBC Bank attained the unique distinction of being the first bank in the UK to offer a Shariah law-compliant insurance policy designed to meet the needs of the Muslim community in the country. HSBC Bank already offers Shariah-complaint current account and pensions’ funds.

The new HSBC Home Takaful insurance policy had specific buildings and contents protection that are suited to meet the needs of the Shariah. The Shariah is an Islamic law which forbids lending money for profit and vice versa. "HSBC's Home Takaful (Islamic) policy is the first of its kind to be nationally available and I am confident that the ethical nature of the Takaful system and its attributes of fairness will have broad appeal," said Amjid Ali, UK head of HSBC Amanah.

He added that until now there had been no policy that was suited to the needs of the 1.6 million Muslim population in the UK. "There are over 1.6 million Muslims in Britain, of which 250,000 are homeowners, but until now they had no easy way of arranging insurance that complies with the Shariah," he observed.

An independent Shariah supervisory committee assisted in framing this policy. The policy is "based on the concept of mutual co-operation in the sharing of risk." Under the Takaful insurance policy, the policyholders will pay their premiums into a singe joint-account thus sharing the risk for their mutual benefit. All the accounts under the Shariah scheme are basic accounts and customers are given debit cards to ensure that they do not earn any interest or derive the benefits of the overdraft facility.

Meanwhile, Lloyds TSB has announced that its Islamic banking facilities would be extended to cover the Newcastle, Preston, Sheffield, Bastwell and Sparkhill in Birmingham branches thus taking the number of such branches with Islamic banking facilities to 22.