UKIFC Launches Brochure to Promote Shariah-Compliant FDI in Scotland

The UKIFC, in partnership with BDO, Gatehouse Bank, Ocorian and Shepherd + Weddernburn has launched a brochure to promote Shariah compliant real estate investment opportunities in Scotland.

With the London real estate market cooling Scotland is a strong and attractive investment destination and, with expertise in both conventional and Islamic finance, it offers competitive Shariah-compliant real estate opportunities.

A number of Shariah-compliant deals have been completed in Scotland in recent years. With a growing and stable economy, underpinned by strong yields, returns on Scottish commercial real estate exceeded the UK average in 2018. Investment reached a record level of £2.5 billion in 2018, up 46% from 2017.

With an enabling legal and regulatory framework and a network of specialist advisers and financiers Scotland provides significant potential for investors seeking Shariah-compliant commercial property structures.

Click HERE to view the brochure.

Photo: The British flag and EU flag pictured flying with the UK Houses of Parliament in the background in London, UK.

Brexit brings risks and opportunities for UK Islamic finance but unlikely to revolutionise domestic industry, say experts

Article published by author: Hassan Jivraj

Publication name: Salaam Gateway

Date of publication: 16 JAN 2020

Article link: Click here


The United Kingdom is set to leave the European Union (EU) on January 31. Uncertainty looms as to whether the government will secure a trade deal with the EU or leave in December 2020 without one.

Nonetheless, Brexit presents various risks and opportunities, such as Islamic finance playing a role in bilateral trade negotiations and the UK’s second sovereign sukuk. Beyond these, it is unlikely it will significantly transform the industry in the UK, according to stakeholders polled by Salaam Gateway.


The biggest uncertainty surrounding Brexit is whether the UK government will be able to secure a Free Trade Agreement (FTA) with the EU, or if it will leave the bloc without a deal.

The risk of a no-deal would have a negative impact on the UK’s conventional and Islamic banking sector.

“Impacts and shocks in the UK economy will obviously also impact the Islamic economy,” Nick Green, Partner and Head of Cross-border Investment at law firm Trowers & Hamlins in Dubai, told Salaam Gateway.

“If we have a No-Deal exit from the EU, the short-to-medium term impact on the economy will not be positive, although I think it will be flat rather than a deep recession,” he added.

Among some of the risks of leaving the EU without a deal is losing the passporting scheme, which allows financial institutions in the bloc to operate, and sell financial products and services in member states without having to apply directly to specific regulators.

“If the EU passporting scheme falls away it will be more difficult to set up banking operations in other EU countries but there is no evidence to suggest UK Islamic banks are looking to set up in the EU outside the UK,” said Chris Tait, Project Manager, Islamic Finance Council UK (UKIFC).

But Mohamed Damak, Senior Director, Global Head of Islamic Finance at S&P Global Ratings downplayed the risks of Brexit’s impact on UK Islamic banks.

“There is no significant linkage between Brexit and the competitive position of domestic Islamic banks in the UK,” he said.

“Islamic finance remains small in the UK with total assets of the Islamic banks at £4.5 billion at Year-End 2018.”


In a post-Brexit environment, it is likely the UK government will seek new trading partners and relationships. Islamic banking and finance can play a role in attracting foreign direct investment (FDI), particularly with Muslim-majority nations.

From his vantage point in the UAE, Nick Green said that to date, most Gulf investors have generally viewed Brexit as a negative.

Middle Eastern investment into the UK is not unsubstantial, from £1.8 billion in 2016 it rose to £2.43 billion in 2017 and £2.6 billion in 2018, according to real estate services provider Savills.

With regards to the government’s position, a UK Treasury spokesperson told Salaam Gateway: “The government remains committed to developing Islamic Finance in the UK to support financial inclusion, encourage investment and enhance its competitiveness as a global financial centre.”

The UK’s five licensed Shariah-compliant banks all have significant shareholders from overseas, notes Stella Cox, Director of DDCAP Group and Chair of TheCityUK’s Islamic Finance Market Advisory Group.

All of the UK’s Islamic banks are majority-owned by Gulf-based financial institutions or investors. For example, Al Rayan is owned by Qatar’s Masraf Al Rayan. Similarly, Kuwait’s Boubyan Bank, previously the majority shareholder of Bank of London Middle East (BLME), acquired the lender in an all-cash takeover in December 2019.

“We have Islamic fund managers and insurance companies. Emerging technology businesses focused on Islamic financial sector opportunities, and also those within the wider halal economy are attracting foreign investors,” said Cox.


While Brexit will present challenges for conventional and Islamic banks in the UK, it will also depend on the bank’s business line and how exposed financial institutions are to the EU.

Charles Haresnape, CEO of Gatehouse Bank said the bank does not trade across borders and that the impact of Brexit is much less than for UK banks which trade internationally.

“Any impact for us would be if customer demand for home finance reduced when customer appetite to purchase UK property contracted. We see this as a low risk given the historical resilience of the UK housing market,” he said.

“All things considered we believe the potential for an adverse impact on Gatehouse Bank from Brexit is low.”

From a growth and profitability perspective Mohamed Damak of S&P said asset quality and earnings of UK Islamic banks could be hit due to the significant concentration of their lending portfolio on real estate activities in case of a disruptive Brexit.

He noted around two thirds of total financing comprised real estate exposures at year-end 2018. But he said these banks enjoy a good level of capitalisation and asset quality indicators.

“At the end of 2018, the average Tier 1 ratio for UK Islamic banks stood at 17.9% and their NPLs ratio at 1.3% according to the Islamic Financial Services Board,” he added.

At present, Al Rayan is the only fully-fledged retail bank out of the five Islamic banks in the country.

Despite the small number of players and with the UK seeking to attract more Islamic investors, it is unlikely a new Islamic bank will be set up anytime soon.

“I don’t see appetite for a new Islamic lender to enter the UK at the moment,” said Nick Green.

“It is also unlikely that GCC financial institutions will set up a large presence in the UK. Instead, GCC investors looking to enter the market are more likely to acquire companies or existing financial institutions.”

However, he said there is potential space for the challenger banks to offer Islamic financial products, if they wish to expand their product line.


This year the UK is set to issue its second sovereign sukuk, which will help London maintain its position as a centre for Islamic finance.

“The UK’s second sovereign sukuk issuance is a key part of this strategy: supporting UK-based Islamic banks through the provision of high-quality, Shariah-compliant, liquid assets; encouraging the growth of the domestic Islamic finance industry and helping ensure the UK maintains its position as the leading Western hub for Islamic finance,” the UK Treasury spokesperson told Salaam Gateway.

The deal will follow the maiden sukuk issued by the government in 2014 when the sovereign became the first outside of the Islamic world to issue such an instrument.

In the following year, UK Export Finance (UKEF), the government’s credit export agency (ECA), guaranteed Emirates Airline’s sukuk to buy aircrafts.

However, there has been little activity in sukuk since then. The most recent Sterling-denominated sukuk came in February 2018 from Al Rayan Bank that issued a debut £250 mln sukuk, which followed a Shariah-compliant equivalent to a residential mortgage-backed security (RMBS).

Beyond the upcoming sovereign issuance, the pipeline of sovereign or UK corporate sukuk is likely to be limited due to cheap domestic funding.

“I don’t envisage UK companies will look at sukuk because domestic finance is plentiful, unless there is a Middle East element such as in the corporate ownership,” said Nick Green.

“It’s still cheaper to do conventional or direct lending. It tends to cost on average around 50bps to 100bps more for the UK’s Islamic banks to offer lending compared to conventional lenders, depending of course on size and purpose of facility.”

On a more positive note Bank of England is currently working on a facility for Islamic banks to help with their liquidity requirements, according to Wayne Evans, Adviser International Strategy for TheCityUK.

“This is a welcome development, as was the Bank’s decision to become an Associate member of the Islamic Financial Services Board,” he said.


Another area that UK will likely seek to develop is the domestic takaful sector.

Stella Cox believes Lloyds of London is interested in promoting takaful and other Islamic insurance products and services.

In 2018, the Islamic Insurance Association of London released guidelines to address capacity constraints and challenges for takaful and re-takaful with the aim of supporting the sector. The guidelines followed the initial set released in 2016.

“The Islamic Insurance Association of London works under the auspices of the Lloyds platform and is seeking to ensure that the market operating environment is sufficiently enabled for Shariah-compliant business to grow further,” she said.

“Overseas investors have shown interest in establishing Shariah-compliant syndicates and we have a Shariah-compliant insurance underwriting agency within Lloyds. Lloyds members offer a range of Islamic products and services across a range of assets and requirements.”

But others say the scope for development in the UK is limited.

“The takaful industry remains small globally and even if we start to see some growth in the UK, we are of the view that it will remain rather small in absolute terms and relative to the insurance industry in the UK,” said Mohamed Damak.

He points to a lack of appetite from clients, lack of standards and also perhaps a lack of offering by the main insurance players.

“As in other markets, takaful companies will need to develop competitive products and do a better job in promoting their offerings/differentiate themselves from conventional insurers in order to grow,” he said.


Irrespective of Brexit, there are still long-standing challenges that will continue to face Islamic banking in the UK, particularly the retail sector.

Shakeel Adli, Partner, Head of Islamic Finance at CMS Law, said the take-up of Muslim consumers has been relatively low. He said this in large part has been down to two factors; firstly a distrust as to whether the underlying products are in fact Shariah-compliant and secondly the pricing arbitrage with conventional products.

“More generally there needs to be greater financial literacy both amongst Muslims and non-Muslims for consumers to be able to make informed decisions,” he said.

He argues that where Islamic products have been particularly successful is when they have outcompeted the conventional market and as such have been able to attract both Muslim and non-Muslim customers.

He cites the examples with savings products in the UK where a number of the UK Islamic banks have offered higher rates than their conventional competitors whilst still allowing customers to benefit from the Financial Services Compensation Scheme.


As Brexit Day approaches, the picture for UK Islamic finance remains mixed.

However, there are other initiatives taking place.

Chris Tait said the UKIFC recently launched a high-level Islamic Finance and Sustainable Development Goals (SDGs) task force that is supported by the UK Government and includes international stakeholders.

“The taskforce will enhance the engagement of the global Islamic finance industry with the SDGs through capacity building, awareness campaigns and promotional activities,” he said.

“Whilst not driven by Brexit it is a good example of the UK leading a global initiative aimed at leveraging Islamic finance to deliver the Global Goals.”

New Islamic finance taskforce to deliver global sustainable growth.

A new international taskforce is to be created with the support of the UK Government to engage the Islamic finance industry with the UN’s Sustainable Development Goals. The high-level Islamic Finance and Sustainable Development Goals (SGDs) taskforce will be anchored in London and run by the Glasgow-based Islamic Finance Council UK (UKIFC). Economic Secretary to the Treasury John Glen said the new initiative will ‘drive forward innovation around the world’. The UK Government will be the founding country partner when it begins in 2020, with an aim to promote understanding and encourage adoption of the UN SDGs amongst Islamic financial institutions. Gatehouse Bank has confirmed participation and interest has already been expressed from Malaysia and Dubai, as well as other UK organisations.

The UN’s SDGs are the blueprint to achieve a better and more sustainable future for all, addressing issues such as climate change, education and equality. But a recent analysis from UKIFC and Malaysia-based ISRA found a considerable lack of knowledge, misunderstandings and minimal engagement by Islamic financial institutions with the SDGs. Islamic finance is one of the fastest growing sectors in the global financial industry, with assets expected to reach US $3.8 trillion in 2022. Innovative financial structuring in the sector can help create instruments that drive capital towards the SDGs. The UK – and London in particular – has already become a centre for Islamic finance, helping finance developments such as The Shard and the Olympic Village. In 2014, the UK Government cemented the UK’s position as a hub for Islamic finance by becoming the first western country to issue sovereign Sukuk – Islamic bonds. With the City’s strength in conventional financial services, the strong legal framework and progressive outlook it continues to intellectually innovative and assist developments in the global Islamic finance arena.

The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It was the first global specialist Islamic finance body to sign up to the UN Principles of Responsible Banking (PRB). With Gatehouse Bank the only fully Shariah-compliant signatory, the UK is leading the way in relation to the Islamic finance sector’s engagement with the global framework that aligns with the SDGs. In 2016, the Church of Scotland and the UKIFC signed a partnership agreement to co-develop an ethical finance solution open to all society, regardless of race, religion or ethnic background and based on the shared values between the faith traditions. The UKIFC supported this month’s Ethical Finance 2019 global summit in Edinburgh, which brought together over 400 senior representatives from more than 200 companies and organisation.

The Economic Secretary to the Treasury, John Glen MP, said:

“The UK is a world leader in Islamic Finance, so I am pleased we’re now a founding country partner and observer member of the new Islamic Finance SDG Taskforce. “This Taskforce will bring together the global Islamic finance community so it can help us meet our international, environmental and sustainability objectives – using UK expertise in sustainable finance to drive forward innovation around the world.”

Richard de Belder, Advisory Board Member of the Islamic Finance Council UK, said:

“Delivering the UN’s Sustainable Development Goals will require private sector involvement. “But business-as-usual in the global financial arena will not deliver the 2030 goals. “A step-change in private investment in SDGs is required, and Islamic finance, as one of the fastest growing sectors in the global financial industry, provides a unique opportunity for innovative solutions. “We need a fairer system of financial management that delivers more than just profit and the inherent principles within Islamic finance are naturally aligned to the sustainability agenda. “This new taskforce will explore ways to bring people and institutions together to help achieve the UN SDGs.”

Charles Haresnape, CEO, Gatehouse Bank, said:

“We welcome the opportunity to support and participate in the Islamic Finance and Sustainable Development Goals Taskforce. “Our Shariah-compliant finance principles mean that our products and services are ethical by design and as a founding signatory of the UN’s Principles for Responsible Banking, Gatehouse Bank has committed to strategically aligning its business with the UN’s Sustainable Development Goals. “We are confident that the taskforce will play a significant role in identifying innovative solutions for sustainable finance in the future.”



The Islamic Finance Council UK (UKIFC) is a specialist, not-for-profit, advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It has helped six countries develop enabling regulatory frameworks for Islamic finance, enhancing financial inclusion to over 15 million people, established the award-winning Ethical Finance Round Table series running since 2010, launched the world’s first joint venture between Islamic finance and the Church of Scotland, and delivered development sessions to over 500 Islamic scholars across the globe.

The framework of an Islamic financial system is based on elements of Sharia (the law of Islam) which governs Islamic societies. The fundamental concept of Islamic finance is that money has no intrinsic value and should only be used as a measure of worth.

Announcement – UK thought body is the first specialist Islamic Finance organization in the world to endorse the new UNEP-led guidelines for responsible banking.

Today Islamic Finance Council UK (UKIFC) became the first advisory body dedicated to Islamic finance to endorse the United Nations Environment Finance Initiative’s (UNEP FI) Principles for Responsible Banking (UN PRBs), joining 64 other international banks and stakeholders.

The UN PRBs represent an opportunity for the Islamic Banking industry, which is made up of over 1,300 financial institutions and windows, and is growing at 6% annually. It is a USD2.4 trillion contributor to the international banking marketplace forecasted to reach USD3.8 trillion by 2023 (Islamic Finance Development Report 2018).

The Principles are the first global framework to enable banks to integrate sustainability across their operations and enhance their positive impact with in the regions they operate in. Arab African International Bank (AAIB) (Egypt), Commercial International Bank (CIB) (Egypt), CIMB Bank (Malaysia) and Garanti Bank (Turkey), which operate in muslim-majority countries, are amongst the founding signatories.

The PRBs strongly align with the principles of Islamic Finance. Alignment and Impact are embedded in the foundational goals of the Maqasid al Shariah, a framework of purpose in Islamic practice that focuses on the objective of wealth and the preservation and continuity of life. Achieving communal prosperity and financial transparency underpin Shariah compliant finance, based on a law designed to protect all members of a society. Fairness and inclusion are themes of Islamic finance that resonate with the remaining four UN PRBs (Clients, Stakeholders, Governance and Transparency). Adopting the UN PRBs will encourage more innovation in the use of Islamic finance instruments to achieving the SDGs, such as green Sukuks.

Omar Shaikh, Member of the UKIFC’s Advisory Board said: “The UKIFC is the leading organization in Islamic finance actively promoting greater integration with the broader ethical finance marketplace. The underlying principles of Islamic finance align well with people, planet and purpose. The enhanced nature of stakeholder involvement in Islamic finance sits particularly well with the ethos of UNEP FI’s Principles for Responsible Banking 6 principles and for this reason we welcome and endorse them.”

Simone Dettling, head of the Banking team at UNEP FI said: “It is fantastic to see this coalition growing so quickly. The Principles for Responsible Banking are rapidly setting the global standard for what it means to be a responsible bank. We invite banks that haven’t endorsed them yet to join and show their commitment to the sustainable banking system of the future.”

The Principles, developed by 28 of the world’s leading banks, are currently out for global public consultation until May 2019 and will become available for signature in September 2019, during the UN General Assembly. Shariah compliant banks and intermediaries are encouraged to join the coalition by endorsing the Principles.

The UKIFC contributes to research and advisory on the alignment of the UN SDGs with the Maqasid al Shariah in the Islamic Banking industry, shaping the industry’s role in the broader ethical finance industry and promoting shared values across faith-based finance and investment institutions (The Edinburgh Finance Declaration).


For media enquiries, please contact: Chris Tait at 

Notes to editors

Islamic Finance Council UK

The UKIFC is a specialist advisory and development body focused on promoting and enhancing the global Islamic and ethical finance industry. The organisation was launched in 2005 by a group of likeminded professionals who sought to make a contribution to the development of the Islamic finance industry. The UKIFC specialises in four core areas, being: 1) Ethical finance – helping to promote better co-ordination and understanding of the shared values between Islamic finance and the broader ethical finance arena; 2) Advisory – specialist capability in advising government agencies, regulatory bodies and financial institutions on creating enabling frameworks for Islamic finance; 3) Executive training – delivering bespoke capacity building programmes aimed at practitioners and regulators focused on commercial issues; and 4) Thought leadership – authoring reports, community education and providing industry comment towards influencing regulation and encouraging the development of the sector based on strong research and insights.

Principles for Responsible Banking 

The six Principles for Responsible Banking that banks commit to are: 

1)    Alignment: We will align our business strategy to be consistent with and contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks. We will focus our efforts where we have the most significant impact.

2)   Impact: We will continuously increase our positive impacts while reducing the negative impacts on, and managing the risks to, people and environment resulting from our activities, products and services.

3)    Clients & Customers: We will work responsibly with our clients and our customers to encourage sustainable practices and enable economic activities that create shared prosperity for current and future generations.

4)  Stakeholders: We will proactively and responsibly consult, engage and partner with relevant stakeholders to achieve society’s goals.

5)   Governance & Target-setting: We will implement our commitment to these Principles through effective governance and a culture of responsible banking, demonstrating ambition and accountability by setting public targets relating to our most significant impacts.

6)Transparency & Accountability: We will periodically review our individual and collective implementation of these Principles and be transparent about and accountable for our positive and negative impacts and our contribution to society’s goals.      

For more information about the Principles visit

UKIFC and CMS join forces to drive growth in Islamic finance industry

The Islamic Finance Council UK (‘UKIFC’) and international law firm CMS today announce an innovative partnership to help develop, support and optimise Islamic finance frameworks across the world. The aim is to offer a single, cohesive legal, advisory and capacity building service tailored to help government agencies, regulatory bodies and financial institutions to respond creatively and develop capacity for Islamic finance.

The partnership launches at a time when global Islamic finance assets are expected to rise from $2 trillion in 2015 to $3.5 trillion by 2021 - representing a 12% compound annual growth rate. Islamic banks are likely to be the main driver of this growth, with assets expected to reach $2.7 trillion by 20211.

“With a growing Muslim population, the potential future demand for Islamic finance is huge,” says Shakeel Adli, Head of Islamic Finance at CMS. “By bringing together a unique blend of practitioners who are recognised leaders in the global Islamic finance market, we are able to draw on our collective knowledge and expertise to provide a one-stop shop offering a truly unique and holistic approach to Islamic finance.”

UKIFC and CMS have recognised that the availability and effectiveness of Islamic finance in any given jurisdiction depends on meeting a number of challenges; the two most significant of which are creating robust regulatory frameworks and developing human talent. To effectively engage in Islamic finance, investors, consumers and financial institutions require regulatory clarity. It is also of critical importance that human talent is developed to address the unique challenges which Islamic finance presents.

The UKIFC and CMS partnership will assist jurisdictions to meet these challenges.

“As leaders in our respective fields, we share a commitment to growing the Islamic finance industry,” says Omar Shaikh, Advisory Board Member at UKIFC. “By combining our capabilities, we have created a uniquely comprehensive, best in class Government advisory providing support and guidance for government agencies, regulatory bodies and financial institutions as they look to build their capacity and create enabling legal and regulatory frameworks for Islamic finance.”

The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. Having contributed substantively to the development of the UK Government’s Islamic finance framework, the UKIFC has been appointed to advise several regulators and government ministries across Africa, Asia and Europe and has developed a proprietary methodology for government policy advisory within a secular context.

CMS meanwhile has extensive experience of successfully delivering Islamic finance regulatory advisory projects in multiple jurisdictions including Kazakhstan and Oman amongst others. Significantly, CMS has a geographic footprint which includes 65 offices spread across 38 jurisdictions. The firm has deep local roots with access to cross-border expertise and strong connections to Governments and associated agency bodies in each of the conventional, Islamic and ethical finance sectors.

“The new partnership between UKIFC and CMS offers a team of passionate and committed Islamic finance experts that genuinely combines legal, finance and capacity building ability that is unlike any other advisory firm,” Omar Shaikh concludes.

1Thomson Reuters State of the Global Islamic Economy 2016/17

UKIFC and ISRA Launch ‘External Shari’ah Audit Report’

A pioneering report calling for an independent audit of Shari’ah compliance in Islamic finance will be launched today at the Global Islamic Economy Summit in Dubai. 

Following consultation with over 35 practitioners across four countries the Islamic Finance Council UK (UKIFC) and International Shari’ah Research Academy for Islamic Finance (ISRA) unveiled the ‘External Shari’ah Audit Report’, which seeks to strengthen Shari’ah assurance and calls for external Shari’ah auditing to be made mandatory in Islamic financial institutions across the globe.

With consumer and regulatory demands increasingly focusing on trust, transparency and accountability corporate governance has become a critical challenge for all financial institutions. In particular, this trend has shone a light on Islamic financial institutions, where in-house boards of scholars effectively self-regulate Shari’ah compliance, raising questions as to whether the current model of governance is fit for purpose.

The report, which reflects recent developments in international policies and regulation, proposes that external Shari’ah audit, requiring Islamic financial institutions to undertake an annual Shari’ah audit by a competent independent party, should become an essential development for the industry to augment the work currently done by Shari’ah boards.

Omar Shaikh, Advisory Board member of UKIFC commented: “Ensuring and maintaining the integrity of the Shari’ah is paramount to sustaining future confidence and growth in the Islamic finance sector. By providing an additional check, external Shari’ah audit will play an important role towards providing reassurance to scholars, financial institutions and customers.”

The report also provides a jurisdictional analysis of current external Shari’ah auditing requirements in Oman and Pakistan, where it has already become mandatory.

Prof. Dr Akram Laldin, Executive Director of ISRA added, “Various initiatives are being taken in different jurisdictions to ensure compliance and maintain the credibility of Islamic finance among stakeholders. External Shariah audit provides additional assurance and it does so with greater independence than others.”

Bahrain looks set to be the next jurisdiction to adopt external Shari’ah audit regulation with the Central Bank of Bahrain recently issuing a consultation paper on their proposals. Dr. Ahmed Abdul Hameed AlShaikh, The Deputy Director of the of Bahrain Institute of Banking & Finance commented, “We strongly believe that the next step in creating robustness in this industry and in safeguarding all relevant stakeholders is an appropriate external Shari’ah audit framework— which many central banks, including the Central Bank of Bahrain, are considering introducing in the near future.”

The report also focuses on implementation issues, providing specific recommendations on the role of central bank Shari’ah boards, requirements for public reporting, qualification of external Shari’ah auditors and the need for a professional body for Shari’ah scholars in Islamic finance.

Yasser S. Dahlawi, CEO of Shariyah Review Bureau concluded, “There is hardly a more important subject in the field of Islamic finance than external Shari’ah audit. As the industry undergoes change, this is the right time to report on something new: a new auditing framework, a new reporting mechanism, and new regulatory mandates. This is because a growing industry needs robust supervision to ensure its positive growth and future progress.”

The e-version of ‘External Shari’ah Audit Report’ can be found at and

For more information contact:

Chris Tait, Islamic Finance Council UK

(Tel) 0044 7931103573 or 0044 7193 6329

Mezbah Uddin Ahmed, ISRA

(Tel) 00603 76514224


Islamic Finance Council UK (UKIFC)

The UKIFC is a specialist advisory and development body focused on promoting and enhancing the global Islamic and ethical finance industry. The organisation was launched in 2005 by a group of likeminded professionals who sought to make a contribution to the development of the Islamic finance industry. The UKIFC specialises in four core areas, being:1) Ethical finance – helping to promote better co-ordination and understanding of the shared values between Islamic finance and the broader ethical finance arena; 2) Advisory – specialist capability in advising government agencies, regulatory bodies and financial institutions on creating enabling frameworks for Islamic finance; 3) Executive training – delivering bespoke capacity building programmes aimed at practitioners and regulators focused on commercial issues; and 4) Thought leadership – authoring reports, community education and providing industry comment towards influencing regulation and encouraging the development of the sector based on strong research and insights.

International Shari’ah Research Academy for Islamic Finance (ISRA)

ISRA is an autonomous body set-up under the direction of the Central Bank of Malaysia (Bank Negara Malaysia) to promote applied research in the area of Shari’ah and Islamic finance. ISRA contributes towards strengthening human capital development and provides a platform for greater engagement amongst practitioners, scholars, regulators and academicians via research and dialogue, in both the domestic and international arenas. Through pioneering research and rigorous intellectual dialogue, ISRA aims to promote innovation and dynamism and thus extend the boundaries of Islamic finance.

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Christians and Muslims unite to tackle banking crisis

The Church of Scotland and Islamic Finance Council UK have announced a partnership to create ethical financial services.

The joint venture will draw on how the Christian and Muslim communities have supported ethical finance in the past and examine the practical commercial viability of new models which can tackle inequality and poverty. This pioneering initiative is the first time the Church and Islamic finance have come together to collaborate and will aim to create solutions open to everyone regardless of religious or ethnic background.

This initiative has come into being through a shared belief that existing financial institutions have in recent years lost their social conscience. Following the banking crisis of 2008, further ongoing scandals of mis-selling payment protection and interest rate fixing have raised the question if reforms have worked. We believe this is an exciting opportunity for faith groups to work together on solutions which will benefit the whole of society, regardless of faith or belief.

On announcing the project Rt. Rev Dr Angus Morrison, Moderator of the General Assembly of the Church of Scotland, said: “In 2012 the Church of Scotland’s special commission on the purpose of economic activity identified human flourishing and the protection of the planet for future generations as two of the most critical purposes for financial interaction. Our current system has gone badly wrong, creating massive inequality and the destruction of our shared natural resources by money-making machines overtaking commerce that serves the common good.

“The Christian and Islamic faith traditions share a commitment to economic justice and a call to an equal distribution of the gifts of God. By collaborating and “putting our money where our morals are” we have an opportunity to live out our common values and make a tangible change for those most affected by poverty. Active concern for our communities is an obligation and we look forward to meeting the challenge together.”

The Islamic Finance Council UK (IFC) is inspired by a commitment to developing a fairer, more responsible finance system. It has been recognised globally for its work in promoting shared values and increasing connectivity between ethical and Islamic finance stakeholders across the UK. For more than 5 years the IFC has been leading the debate on ethical finance through a series of events based in Edinburgh.

IFC Advisory Board Member Omar Shaikh said: “In recent years we have developed a strong relationship with the Church of Scotland and this project is a result of that positive engagement and the mutual desire to work collaboratively on a project which brings together the best of our respective faiths. The positive message of faith groups working together presents a beacon of light which we hope can inspire many others across the world.

“Scotland has a proud heritage in ethical finance with the savings bank movement able to trace its origins back to the Rev. Henry Duncan of the Church of Scotland. This model was also used as the blueprint for the early Islamic banking attempts in the 1960s, which makes it particularly poignant that this new initiative in being led in Scotland.”

The project will research, shortlist, test and then establish a viable ethical finance business solution. The consultation and business plan phase is expected to last a year, with the first workshop to take place this May in Edinburgh with theological and financial experts coming to Scotland from as far afield as Nigeria, Malaysia and Bahrain.

Additional Notes

International Islamic Finance 

Worth over $2trn, the Islamic finance sector has witnessed tremendous growth over the past decade. Moving forward a key growth strategy for Islamic financial institutions will be their ability to successfully enter and tap the considerably larger ethical finance arena. Along with the commercial opportunity, by focusing on the inherent convergence in ethical values will increase the appeal of Islamic finance in new global markets and allow an avenue to address the aspirational dissatisfaction growing within the industry as witnessed by key stakeholders raising concerns over excessive synthetic imitation of conventional structures.

Africa and Nigeria specifically is well known for its triple heritage. Often referred to as non-interest finance, Nigeria has been taking a lead in developing this sector to promote financial inclusion. Ex-Governor of the Central Bank of Nigeria, HH Emir Sanusi commented, “One immediate success of this initiative is how it is bringing together faith communities on their common values. This is powerful example that many globally can take from, including us in Nigeria. Well done to the Islamic Finance Council UK and the Church of Scotland for showing their vision, leadership and bravery.”

Islamic finance in Malaysia has taken considerable market share and attracted many Chinese Malays and those not of the Islamic faith. Dr Akram Laldin, CEO of Malaysia based Bank Negara body ISRA commented, “Islamic finance is founded on moral and ethical values and these values are shared by different faiths. This joint venture with the Church demonstrates that people from different faiths can work together on the common ground that we share. Together we can strive for the betterment of humanity.”

Scottish communities show leadership

Minister for Europe and International Development, Humza Yousaf, said: “Ethical finance offers a great opportunity to diversify Scotland’s financial services industry, allowing it to grow and prosper. I’m delighted to see the Islamic Finance Council’s hard work in this field acknowledged by the EFICA. The Scottish Government is committed to creating a more socially responsible and fairer economy in Scotland and is building upon our progress to become a worldwide industry leader in the field.”

Since the issuance to the public, in 2013, of its report on the purpose of economic activity the Church of Scotland has promoted a range of new initiatives including the development of the Churches Mutual Credit Union in partnership with other UK churches and support for WEvolution, a pioneering movement developing Self Reliant Groups and social enterprise in Scotland’s poorest communities.

Rev Sally Foster-Fulton, convener of the Church of Scotland’s Church & Society Council said: “In the Church we don’t just want to talk about how we need to do things differently. We want to demonstrate how we can and are. Working with the Islamic Finance Council UK is an important part of that work. Not only are we trying to build a fairer economy together. We are also building vital friendships and relationships across our faiths. That is also really significant in today’s world where these relationships are so often defined by division.”

Scotland’s leading Sunni Muslim theologian, Shaykh Ryzwan commented, “Today marks the beginning of extensive consultation between Muslim faith representatives headed by IFC and its associates and the Church of Scotland on working towards a shared principles framework distilled from the intellectual legacy of the two great faith traditions that will inform the debate on ethical and sustainable models of economy. As the financial crisis of the last decade is being pushed firmly to the back of the collective memory, the systemic non-sustainability of the current financial model further amplifies the need to highlight alternative practice that places human nurturing and the environment at the core of deliberation on what economy should be.

In doing so, it also engages those that question the relevance of religion in the creation of the common good, and provides a new model of Interfaith engagement - moving from dialogue to action. The Scottish context of this initiative, with its unique history in the development of the Enlightenment, in ethical banking as well as its pioneering ecumenical work, serves as the perfect environment in which to embark on this journey.”

UK leading innovation as a global financial hub

Prime Minister David Cameron has stated the UK’s position as a center for Islamic finance.  As the first Western government to issue a sovereign sukuk, today’s pioneering development of interfaith collaboration showcases the UK’s ability to innovation and contribute to the global Islamic finance sector.

Lord Sheikh, Patron of the Islamic Finance Council UK and Co-Chair of the All-Party Parliamentary Group on Islamic Finance and Diversity in Financial Markets, said, “The UK has successful positioned itself as the leading Western Hub for Islamic finance with over £20bn in shariah-compliant assets. This pioneering retail focused initiative presents a great opportunity to build not only a robust sustainable business but also demonstrates British communities working together building stronger, interdependent communities.”

For more information contact:

Chris Tait, Islamic Finance Council UK

(m) 07931103573

Rob Flett, Communications Manager, Church of Scotland

(m) 07764 335793

About the Islamic Finance Council UK

The Islamic Finance Council UK (IFC) is a specialist advisory and development body established to promote and enhance the global Islamic and ethical finance industry. Operating since 2005, the IFC Executive Board brings together a unique blend of seasoned practitioners who are recognised leaders in the Islamic finance market and have worked for leading global institutions. The Council has successfully pioneered a number of unique developmental and educational programmes.

About the Church of Scotland 

The Church of Scotland is Scotland’s national church and is also one of the UK’s largest charities. It serves almost 400,000 members, with more regularly involved in local congregations and our community work. Within the organisation, the Church has around 800 ministers serving in parishes and chaplaincies, supported by professional and administrative staff. The Church has a proud tradition of working to benefit those less well off in society, and campaigns on a range of economic and social welfare issues.


Scottish Ethical Finance Hub launches at Heriot-Watt University 

An ethical finance hub will be announced tonight at Heriot-Watt University’s Edinburgh campus, establishing Scotland as a leader in this field. The Scottish Ethical Finance Hub (SEFH), which has received backing from the Scottish Government as well as leaders in the financial sector, will be based at Heriot-Watt University and become a centre for the promotion and development of ethical finance practice.

The SEFH concept has emerged from a series of roundtables held over five years, initiated by the Islamic Finance Council UK (UKIFC). Participants have represented a broad range of sectors including banking, asset management, faith groups, academia, government and the third sector.

Dr Robbie Mochrie, Associate Professor of Economics at Heriot-Watt University and a member of the SEFH steering group, added: “Since the crash in 2008, there has been a growing international demand for more ethical financial practices, whether that’s developing rules that people can sign up to, or principles and behaviours that are considered ethical.

“In hosting the Hub’s initial development, Heriot-Watt University can be a critical friend of the financial services sector. Our academics have expert knowledge of how the various markets and practices work, but don’t directly work in them. We’re able to question and hopefully point the way towards more ethical practice.”

Graham Burnside, consultant at Shepherd and Wedderburn LLP and Chairman of the SEFH steering group said: “In the coming months we’ll be focusing on what ethical finance in Scotland can and should involve, and how we can link in with international markets.

“Ethical finance is a rapidly growing segment of the financial services sector and there’s huge opportunity for Scotland to build on its distinguished heritage. The Hub can be an excellent channel to further this agenda and promote Scotland as a key global centre in this developing field.”

Deputy First Minister and Cabinet Secretary for Finance, Constitution and the Economy John Swinney MSP said

“The Scottish Ethical Finance Hub will see the Islamic Finance Council work with Heriot Watt University to develop a model that has the potential to make a real impact internationally.

“I’m pleased to say the Scottish Government is supporting this project with up to £50,000 of funding, which will allow Scotland to capitalise on the increased global profile of ethical finance and progress towards becoming a worldwide industry leader in the field.”

The SEFH will begin its residency at Heriot-Watt University on Thursday 29 October with a discussion on how businesses can build a more sustainable world through ethical finance, focusing on existing challenges and potential solutions. As well as Dr Robbie Mochrie speakers will include Omar Shaikh, advisory board member of the UKIFC and Ryan Smith, head of corporate governance and SRI at Kames Capital, an investment management firm.

Scotland’s reputation within the ethical finance sector has had a series of recent boons. In September 2015, over 250 finance and investment professionals from across the globe came to Edinburgh for the inaugural Global Ethical Finance Forum. This was quickly followed by the UKIFC winning the prestigious Industry Development Award at the Ethical Finance Challenge and Innovation Awards in Dubai.


Media contact: For Heriot-Watt enquiries, please contact Sarah McDaid, Pagoda PR (0131 556 770/ )

FOR SEFH enquiries, please contact Chris Tait Tel: 07931103573

Notes to editor 

About SEFH 

The SEFH concept can be framed in the context of a rapidly developing and varied global ethical finance industry, including:

  • Retail finance – UK retail banks are currently exploring how to embrace ethical practice to restore their reputations; speciality banks, such as Triodos and Charity Bank, are developing their niche; and credit unions offer a path to community-based retail banking.
  • Funds management – asset managers responding to client demand for investment activities under labels such as ethicalresponsible, or sustainable. UK government policy seems likely to increase the role of social investment vehicles in the provision of public goods.
  • Islamic finance – an area in which London has played a prominent global role, and which might be a source of foreign direct investment, infrastructure finance, funds for asset management and new entry into retail markets.
  • Academia – working in partnership with Scottish HEIs, the Hub will bring together research capacity and the provision of executive training in the ethical finance sector including contemporary trends in SRI, ESG and social impact investing.