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Shariah Investment

Shariah Investment

A Short Guide to Shariah as it relates
to the Gatehouse Bank savings accounts

Why do the accounts pay profit not interest?

The payment and receipt of interest is forbidden in Islam as money cannot in itself generate money. Instead, profit should be generated through the exchange of goods or services that are consistent with Shariah principles. Furthermore, capital should not be left idle, but put to use through investment.

Ethical considerations

General principles of Shariah include a prohibition on excessive uncertainty, gambling and speculation - criteria that are adopted by many ethical investors regardless of their religious conviction. There are also restrictions on how deposits can be invested.

Where is the money invested?

As an Islamic bank and adhering to Shariah principles Gatehouse Bank will only invest funds in ethical goods and services and, for example, does not invest in gambling, alcohol, tobacco or arms. Examples of eligible investments include construction projects, certain real estate investments and sukuk (sometimes known as Islamic bonds).

What role does Gatehouse Bank play?

As a Shariah-compliant bank, Gatehouse takes deposits and invests the funds in a portfolio of assets in accordance with Shariah principles and with the aim of generating the expected profit rate. Gatehouse Bank also has an obligation as trustee and is therefore accountable to depositors under Islamic principles of finance in the event that it acts negligently.