Sharia Law is an umbrella term for Islamic religious law, or path to follow. It deals with a variety of social, economic and political matters. In economic terms, to charge interest (the Islamic term for interest is ‘riba’) or to be charged interest, whether you are a company, bank or individual, goes against Sharia law and is therefore strictly forbidden. Adhering to Sharia law means that a lot of financial services in the UK are off-limits.
In 2004, it was recognised that the demand for Sharia-compliant finance was worth around £4 billion. As a result, over the past decade in particular, banks and companies in the UK have been developing ways to ensure their financial agreements, such as the taking out of mortgages, are Sharia compliant.