Islamic finance expert welcomes budget
The government’s continued support for Halaal finance, as outlined in the Budget, has been welcomed by a UK Islamic Finance expert.
Within the budget, the Chancellor re-iterated a commitment to “promote the expansion of the UK market in Islamic finance.”
He also announced measures designed “to promote the City of London as a centre for global Islamic finance.”
Junaid Bhatti, Director of Islamic Finance consultancy “Ballencrieff House” was part of the team that set up the first Islamic bank in the Western world.
He said, “Promoting ethical financial conduct is at the core of Islamic principles. The Chancellor is working to create a level playing field for British Muslims who want to run their financial affairs in accordance with their religious ethics.”
“Right now the capitalist economies are suffering severe liquidity shortages due to the global credit crunch. These economic problems are a result of irresponsible lending and the gambling of customers’ money by non-ethical financial institutions.
“Islamic finance is the perfect antidote to this, because it forces banks to act more responsibly and with greater prudence. It does this by balance risks between banks and their customers, and through an insistence that all transactions must be supported by tangible assets.”
“The Chancellor’s budget lays the foundations for the UK government to issue a sovereign Sukuk (Islamic bond) within the next year. Several measures have been announced to assist with this historic project.
“The main changes will be the introduction of changes to the stamp duty and taxation regulations, which will ensure that Sukuk will be given the same tax treatment as conventional bonds.”
The Chancellor’s intended changes are expected to provide a boost for the UK’s Islamic finance industry.
“Official support for Islamic finance, through the issuance of Sukuk by a Western government, will send a powerful signal to Muslims in the UK and abroad.
“Muslim in the UK will be given confidence in the stability and long-term prospects of the fledgling industry, and will be encouraged to start switching their finances to the Halaal alternative.”