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CIMA: Islamic finance must be kept separate to comply

20/12/2007

Islamic finance and conventional UK financial services must operate "side by side" and remain separate as they cannot be fully integrated, according to the Chartered Institute of Management Accountants (CIMA).

Although UK institutions may offer Islamic products, such as mortgages, these must be provided through a subsidiary which is separate from the non-Shari'ah compliant areas of business.

Conventional UK finances are "built on" the principles of interest and uncertainty, which are illegal under Muslim Shari'ah law.

John Willsdon, learning and development specialist for the CIMA, said: "Conventional financial institutions cannot just offer Islamic products or services alongside their conventional products or services. From an Islamic perspective the Islamic products and services would be 'tainted' by the operations of the conventional side of the business."

In November the Financial Services Authority estimated Islamic finance to be worth about £250 billion globally, with a conservative estimate of ten to 15 per cent growth per annum.

This month CIMA became the first chartered accountancy body to offer a global qualification in Islamic finance.

 

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