Islamic Bank Australia has been granted the first restricted licence for a Sharia-compliant bank in Oz.
👉 Background: In Australia, there are now over 810,000 people who identify with Islam. And that number is increasing by 6% every year. But, for many Muslims, finding a Sharia-compliant bank has been a challenge.
👉 What happened: Now Islamic Bank Australia has been granted the first restricted licence for a Sharia-compliant bank in Oz. TY, APRA!
👉 What else: This is a pretty big deal because it'll involve a totally different, Sharia-compliant approach to banking.
💡When it comes to Islamic finance, think of conventional banking… And then flip it on its head. The big difference is, under Sharia law, interest on loans is prohibited.
💡Muslims around the world had to find a workaround that would allow the customer to not pay interest, but still be commercially viable for a lender. Enter: non-interest Sharia-compliant banking. It's a partnership of "co-ownership" between banks and customers.
💡Rather than charge you interest, banks charge rent instead, which decreases as the customer owns more of the house. For savings accounts, it's more of a profit-sharing arrangement, also with no interest.
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