NatWest Business Banking is entering the Islamic financial services market with the launch a shariah-compliant commercial property mortgage product.
The product, introduced in response to demand, will not charge interest in accordance with Islamic law.
NatWest has over 40 relationship managers specially trained to meet the needs of the Islamic community, as well as a number of specialist diversity banking teams, including one in Birmingham.
The product is the first shariah-compliant facility NatWest Business Banking has launched.
NatWest Business Banking chief executive officer Paul Lynam said: “We are committed to meeting the business needs of all customers. By introducing a shariah-compliant commercial mortgage, we are demonstrating our commitment to this community, and the broadening of our focus on this market.”
Head of NatWest’s diversity banking team in Birmingham Manjit Kang said: “NatWest formed the diversity banking team to support the growing demand for business advice amongst the Black, Chinese and Asian business community. Now we have the shariah-compliant commercial mortgage we can take this to a new level.”
The product, sanctioned by an internationally renowned and independent board of Islamic scholars, is based on the Islamic “Murabaha” structure a widely accepted shariah-compliant financing method.
This means the bank will purchase the property from the vendor and immediately sell to the customer.
The price paid by the customer to the bank is repaid over a deferred period and consists of the price paid by the bank, less any customer deposit, and an element of profit for allowing repayment over time.
Islamic finance products have grown rapidly in recent years.