ID :
65856
Mon, 06/15/2009 - 17:02
Auther :
Shortlink :
https://oananews.org//node/65856
The shortlink copeid
AUSSIE BANK PLANNING TO INTRODUCE SYARIAH LOANS
By Neville D'Cruz
MELBOURNE, June 15 (Bernama) – The National Bank of Australia (NAB) is
planning to introduce "Muslim-friendly" loans that do not charge interest, to
comply with Syariah laws (Islamic law).
The bank will structure an Islam-approved line of finance to make money from
alternative methods, The Daily Telegraph reported.
These include profit-sharing on the transaction, joint-ventures or
leasing-type arrangements.
For example, to get round the Islamic ban on usury -- or unfair lending - a
Muslim mortgage often works by the bank buying the property, then selling it to
the customer at a profit, with the customer then repaying the entire sum in
instalments.
In this way the profit margin is built in from the start. It also has the
advantage of making the loan immune from future interest rate rises, the
newspaper said.
NAB said the loans, which will start out small, will have to be cleared by a
Syariah Advisory Board to ensure they meet strict criteria before they can be
made available to the public.
"We are dipping our toe in the water with this scheme and thought we may be
able to offer this product in high-density Muslim areas," Richard Peters, head
of community finance and development at NAB told The Daily Telegraph.
"We suspect there is demand out there, but we don't know how big it is, so
we will trial a few products first."
For the trial's purposes NAB will pump A$15 million from its non-profit
finance division into the programme, which will distribute the funds through
various community finance schemes around the country. The bank will monitor the
take-up and assess potential demand.
Interest-free loans of up to A$1000 will be available to help finance
household items, such as washing machines and fridges.
The loans would also be available to non-Muslims, the newspaper said.
The news comes just days after federal Assistant Treasurer Chris Bowen said
that Australia could exploit international demand for Islamic finance to create
more jobs.
-- BERNAMA
MELBOURNE, June 15 (Bernama) – The National Bank of Australia (NAB) is
planning to introduce "Muslim-friendly" loans that do not charge interest, to
comply with Syariah laws (Islamic law).
The bank will structure an Islam-approved line of finance to make money from
alternative methods, The Daily Telegraph reported.
These include profit-sharing on the transaction, joint-ventures or
leasing-type arrangements.
For example, to get round the Islamic ban on usury -- or unfair lending - a
Muslim mortgage often works by the bank buying the property, then selling it to
the customer at a profit, with the customer then repaying the entire sum in
instalments.
In this way the profit margin is built in from the start. It also has the
advantage of making the loan immune from future interest rate rises, the
newspaper said.
NAB said the loans, which will start out small, will have to be cleared by a
Syariah Advisory Board to ensure they meet strict criteria before they can be
made available to the public.
"We are dipping our toe in the water with this scheme and thought we may be
able to offer this product in high-density Muslim areas," Richard Peters, head
of community finance and development at NAB told The Daily Telegraph.
"We suspect there is demand out there, but we don't know how big it is, so
we will trial a few products first."
For the trial's purposes NAB will pump A$15 million from its non-profit
finance division into the programme, which will distribute the funds through
various community finance schemes around the country. The bank will monitor the
take-up and assess potential demand.
Interest-free loans of up to A$1000 will be available to help finance
household items, such as washing machines and fridges.
The loans would also be available to non-Muslims, the newspaper said.
The news comes just days after federal Assistant Treasurer Chris Bowen said
that Australia could exploit international demand for Islamic finance to create
more jobs.
-- BERNAMA
