Islamic finance 'should remain separate from mainstream'

Fri, 21 Dec 2007

Islamic financial products cannot be fully integrated in the mainstream market, it has been suggested.

While such services can operate "side-by-side", Islamic financial services should remain separate, according to John Willsdon of the Chartered Institute of Management Accountants (Cima).

According to Mr Willsdon, conventional financial services and products are built on "prohibited" principles of uncertainty and the charging of interest .

These are illegal under Shari'ah law, the guidelines all Islamic financial products need to adhere to.

"Conventional financial institutions cannot just offer Islamic products or services alongside their conventional products or services," explained Mr Willsdon.

"From an Islamic perspective the Islamic products and services would be 'tainted' by the operations of the conventional side of the business ."

As a result, the two "sets of activities" should be separated in totality, he added.

Last month, the Financial Services Authority said the Islamic finance sector is worth some £250 billion globally.
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