US bankers follow shariah to strike gold

NEW YORK: With census figures showing Islam to be the

fastest growing religion in the US, investment firms

and banking institutions are scrambling to find stocks

and schemes which are compliant with the shariah. 

In an article captioned 'Finding Allah, Striking

Gold', the Business 2.0 reports that over 170

financial institutions managing upwards of $175

billion worldwide offer banking or investment services

in keeping with shariah. 

The magazine quotes the Bahrain Institute of Banking

and Finance as saying that the value of Islamic funds

are growing 15 per cent annually as banks such as HSBC

and Citigroup revise their loan schemes. 

HSBC reportedly is planning to restructure US Islamic

clients' loans, deposits and credit cards to ensure

shariah compliance. For example, in a home loan it

would avoid interest-bearing agreements by buying the

home and having the client pay the bank at an

agreed-upon profit. 

The Islamic law forbids acquisition of stocks in

companies that charge interest. Trading, margin

trading and short selling are also prohibited. 

But still many other opportunities remain, it says. 

Online Islamic stock-trading sites such as

and competing site maintain shariah boards

of Islamic experts who screen companies and stocks. 

The boards also give advice to potential investors on

finance Islam-style and ways to "purify" a portfolio

by donating profit from interest and dividends to

charity, says the report. operates three shariah-compliant mutual

funds holding over 1000 stocks, all listed on the new

Dow Jones Islamic market. 

Soon these online trading sites, it says, hope to give

banks a run for their money by offering Islamic

insurance, mortgages and pensions. 

( PTI ) 


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