Barclays - the Islamic bank

[Ozzie Osmond]

Following the part-nationalisation of Barclays by Qatar and Abu Dhabi can we look forward to Islamic banking on every High Street in the UK?

Perhaps no more "mortgages" from Barclays. Instead of lending you money so you can buy a house, the bank could buy the house itself and then re-sell the house to you at a higher price payable in instalments over time.

You end up paying exactly the same. But it is of course much more ethical than giving you a mortgage....

[Fuzzy Wuzzy]

Ozzie Osmond said:

Following the part-nationalisation of Barclays by Qatar and Abu Dhabi can we look forward to Islamic banking on every High Street in the UK?

Perhaps no more "mortgages" from Barclays. Instead of lending you money so you can buy a house, the bank could buy the house itself and then re-sell the house to you at a higher price payable in instalments over time.

You end up paying exactly the same. But it is of course much more ethical than giving you a mortgage....

Link to Daily Mail article please.

[mercemployee]

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

[scotal]

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

[Maxf]

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

How does stamp duty work if you aren't buying the asset, just renting it?

[Pesty]

so they took their money and have to pay 16% instead of the governments and pay 12%.


hmmm couldnt be that the government would have stopped them paying managers bonuses could it?

[scotal]

Maxf said:

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

How does stamp duty work if you aren't buying the asset, just renting it?

Stamp is still paid as the bankis buying the house, not the individual When the rent paid by the "borrower" is equal to the value ofthe house and the interest that would be charged on the money in a non sharia mortgage the ownership of the house passes form the bank to the "borrower". The law was altered so that a second stamp duty was not payable on this transfer.

[ZR1cliff]

Along the same lines. Last night one of the fares I carried works for an insurance company's corporate legal Dept in the city. We got on to the subject of the credit crunch and I asked how their business was being affected. The person replied we are an Islamic insurance company and are not being affected, we don't invest in the same way. I tried to get them to expand on what they meant but the conversation went off in another direction.
Just thought I'd share that little snippet of info, sorry to go off track a little.

Edited by ZR1cliff on Friday 31st October 16:21

[Maxf]

Pesty said:

so they took their money and have to pay 16% instead of the governments and pay 12%.


hmmm couldnt be that the government would have stopped them paying managers bonuses could it?

Maybe the Government who fk everything up and would strangle their investment banking arm through unrealistic caps and politics. 4% to get ahead of the other UK banks who have taken the government £ seems cheap if it means you can have a long competitive advantage over other banks in the same market. Depending how you look at it, obviously.

[Muntu]

Islamic banking?

allah will never figure out that interest is being paid eh?

[Maxf]

scotal said:

Maxf said:

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

How does stamp duty work if you aren't buying the asset, just renting it?

Stamp is still paid as the bankis buying the house, not the individual When the rent paid by the "borrower" is equal to the value ofthe house and the interest that would be charged on the money in a non sharia mortgage the ownership of the house passes form the bank to the "borrower". The law was altered so that a second stamp duty was not payable on this transfer.

But isn't stamp duty applicable to leases over a certain value (I forget the method of calculation), so should be paid by the borrower for the lease AND the bank for the purchase?

[ln1234]

To be fair though, Islamic finance doesn't seem to be as badly affected by the credit crunch. Possibly to do with less leverage and restrictions on what funds can be invested in.

[Chilli]

Islamic banking has been around for years. All the major players offer these types of accounts. However, rather than paying interest etc, fees are exchanged!

[scotal]

ZR1cliff said:

Along the same lines. Last night one of the fares I carried works for an insurance companies corporate legal Dept in the city. We got on to the subject of the credit crunch and I asked how their business was being affected. The person replied we are an Islamic insurance company and are not being affected, we don't invest in the same way. I tried to get them to expand on what they meant but the conversation went off in another direction.
Just thought I'd share that little snippet of info, sorry to go off track a little.

I think (and may be wrong) that Islamic firms work with investments that are permitted by Islam, so anyhting that involces charging or paying interest is a no-no. That would wipe out bonds etc.

"Islamic investing is based on investing only in “halal” or “permissible” products and the sharing of profits and losses prescribed by Shariah, or traditional Islamic law. Generally, Islamic financing forbids investment in companies that deal primarily in alcohol, pork, pornography and gambling or profit from charging and accruing interest."

[scotal]

Maxf said:

scotal said:

Maxf said:

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

How does stamp duty work if you aren't buying the asset, just renting it?

Stamp is still paid as the bankis buying the house, not the individual When the rent paid by the "borrower" is equal to the value ofthe house and the interest that would be charged on the money in a non sharia mortgage the ownership of the house passes form the bank to the "borrower". The law was altered so that a second stamp duty was not payable on this transfer.

But isn't stamp duty applicable to leases over a certain value (I forget the method of calculation), so should be paid by the borrower for the lease AND the bank for the purchase?

I'm guessing that the rules are applied to make sure the SDLT is only paid once. Maybe the lease between bank and borrower is treated like some sort of ultra secure AST, and therefore falls outside Stamp.

[dr.pepper]

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

Islam strictly forbids interest. The banks will still make their money by charging fee's, it just that it's technically not interest.

[Soovy]

dr.pepper said:

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

Islam strictly forbids interest. The banks will still make their money by charging fee's, it just that it's technically not interest.

It's like my mate from logistics, he's a muslim. Only drinks beer though.

[8Ace]

dr.pepper said:

scotal said:

mercemployee said:

Is islamic banking worse or better than "normal" banking?

Honest question as I have no clue. Islamic banking could be the best system in the world for all I know.

Form a mortgage point of view its pretty much the same, but the mechanics and jargon are altered to make it all Sharia compliant.

Islam strictly forbids interest. The banks will still make their money by charging fee's, it just that it's technically not interest.

Allah the all-knowing said:

Yeah, but it is though.

Edited by 8Ace on Friday 31st October 16:32

[chevy-stu]

scotal said:

Generally, Islamic financing forbids investment in companies that deal primarily in alcohol, pork, pornography and gambling or profit from charging and accruing interest."

That wipes out anything from the far east then.....

[ZR1cliff]

scotal said:

ZR1cliff said:

Along the same lines. Last night one of the fares I carried works for an insurance companies corporate legal Dept in the city. We got on to the subject of the credit crunch and I asked how their business was being affected. The person replied we are an Islamic insurance company and are not being affected, we don't invest in the same way. I tried to get them to expand on what they meant but the conversation went off in another direction.
Just thought I'd share that little snippet of info, sorry to go off track a little.

I think (and may be wrong) that Islamic firms work with investments that are permitted by Islam, so anyhting that involces charging or paying interest is a no-no. That would wipe out bonds etc.

"Islamic investing is based on investing only in “halal” or “permissible” products and the sharing of profits and losses prescribed by Shariah, or traditional Islamic law. Generally, Islamic financing forbids investment in companies that deal primarily in alcohol, pork, pornography and gambling or profit from charging and accruing interest."

I got the impression, from what the person said, the company avoided all stocks and shares.
Thanks for explaining.