6 September 2004 LAWFUEL Best for law, law news, legal news, law research Clifford Chance has advised Islamic Bank of Britain Plc (“IBB”) in obtaining authorisation from the Financial Services Authority (“FSA”) to operate as an Islamic Retail Bank in the UK. The Bank is headquartered in Birmingham with branches in London and Birmingham and a new branch to open shortly in Leicester. This is the first time that a financial institution has been specifically created and authorised to service the needs of Britain’s estimated 1.8 million Muslims.
Clifford Chance partner, Tim Plews, commented:
“This is a landmark authorisation for the provision of retail banking services in the United Kingdom. Islamic banking is well-established in the Arab World and Asia and IBB are now bringing it as a stand-alone retail banking proposition to British customers.”
In obtaining FSA authorisation IBB has had to put in place management systems, governance arrangements and a suite of products satisfactory to the FSA. Clifford Chance advised IBB on all legal aspects of its bank licence application. Islamic banking must be compliant with Sharia law involving, for example, a prohibition on the earning or paying of interest. Sharia law bans investment in industries related to alcohol, gambling or weapons.
“Our legal work for IBB helped ensure the creation of the new bank and its obtaining of a licence was as smooth a process as possible. Dealing with the FSA on an application for a new type of retail banking service required us to combine technical expertise with our extensive experience of working with the FSA. We are very pleased with the outcome and wish IBB every success.”
IBB is also planning to float on 12 October 2004 on AIM (the Alternative Investment Market of the London Stock Exchange) following a UK public offering and private placement in the Middle East. Clifford Chance is acting as legal adviser to IBB on its flotation.
The Clifford Chance team was led by partner, Tim Plews, with assistance from associates, Liz Cramb, Lucie Nunn and Abhijeet Sen.