Muslim Money Deutsche Bank Launches Shariah Compatible Funds
With Islamic banking attracting more and more investors, Deutsche Bank has launched a new set of mutual funds that are Shariah compliant. The market for such funds is growing quickly.
Charge it, Shariah style.
Luckily for moneyed Muslims, there are a number of Islamic Financial Institutions (IFFs) out there catering to the needs of the devout. Over 250 of them to be exact managing funds totalling more than $300 billion. And with more and more Muslims interested in pious repositories for their assets, even financial institutions in the West are getting into the act.
Indeed, last week, Deutsche Bank launched a range of "Shariah compliant" mutual funds. Initially, the funds will be available to investors in United Arab Emirates and Bahrain, but will expand in Asia and Europe in 2007. With their five "Noor Islamic Funds," Deutsche Bank joins the Swiss bank UBS, Britain's HSBC and the American Citigroup, all of which have their own halal financial products on offer.
Previously, a Deutsche Bank spokesperson told the Berliner Zeitung, "the lack of offers meant that Muslims had to hide their money under their pillows."
Even as Deutsche Bank throws its hat into the ever growing ring, Islamic banking products are quickly expanding. The Islamic Bank of Britain was founded in 2004 to serve the UK's Muslim population and a growing number of pious consumer loan, mortgage, insurance products are on offer. The number of Muslim credit cards has likewise been quickly multiplying.
According to the Koran, Allah allows trade but not interest. Thus Muslims are forbidden from paying or earning interest on their investments and Islamic banks cannot lend their money in the form of credit. Furthermore Muslims cannot invest in companies counter to their religious beliefs, such as those involved in alcohol or gambling, pork products, pornography, or armaments.
Deutsche Bank seems to have discovered Islamic banking last year when Anshu Jain, co-director of Deutsche Bank's investment banking division, travelled to Riyadh to meet with Prinz Walid Ibn Talal, a major Citigroup investor in Saudi Arabia. Since then Deutsche Bank subsidiary DWS Investments has developed has developed the Noor Islamic Fund line together with Islamic scholars to ensure that they complied with Shariah law.