NAB has launched a specialized corporate finance product for its Muslim clients, the latest result of a program launched five years ago.
This specialized product follows the requirements of Islamic law where charging interest to customers is prohibited. This practice is considered dishonest because the lender does not assume part of the risk.
NAB now offers Sharia-compliant loans for the construction and development of commercial properties for more than $ 5 million. These loans are structured to work like a lease, “where ‘rent’ and ‘service charge’ are paid instead of ‘interest’,” according to the bank.
“We have negotiated some really interesting structural elements to finalize this latest offer to ensure that we comply with Australian federal and state tax laws while remaining true to Islamic principles,” said Dr Imran Lum, director of Islamic finance. . in the NAB transaction structuring and execution team.
Muslims make up 2.6% of Australia’s population, or around 600,000 people, according to the 2016 census data. And industry reports claim that there is a $ 250 billion market for Sharia-compliant finance and investment in Australia.
NAB is the first major Australian bank to create financial services for Australians who practice the Islamic faith. It also offers Sharia-compliant home loans.
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