The University of East London (UEL) has opened an Islamic finance research hub at its Docklands campus library.
The centre will offer masters degrees in Islamic finance and banking, and conduct microfinance and sharia compliance research with an eye to expanding the industry.
Islamic banking is based on sharia principles of risk-sharing, asset-based investments and zero-interest lending and borrowing.The university hopes to recruit the "waiting student base" which is 14% Muslim in Hackney.
Nora Colton is Dean of UEL’s Royal Docks business school, and a representative of Islamic Development Bank.
Islamic banks or Islamic arms of high street banks (Barclays, Lloyds and HSBC) do not do business with industries deemed illegitimate by Sharia law.
Muhammad Shikder of the sharia-compliant Gatehouse Bank said: "Islamic banking, by its very definition, means ethical banking. If a company has more than 30% debt we wouldn’t invest in that company.
In conventional banking they can take any risks they want and make up for it by setting interest rates accordingly," he added.
Assets in Islamic banking will grow US$1.8 trillion globally by 2014, reported Financial Times. London has become the largest international centre for Islamic finance outside the Muslim world.
Through its research, UEL aims to close the gap that industry leaders have identified in services that may alienate less wealthy sectors who want opportunities within sharia compliant products, or just an alternative form of banking.
The Islamic Bank of Britain remains the UK’s only wholly sharia-compliant retail bank with six branches nationwide, two of them are in London.
Some mainstream banks such as Lloyds TSB and Barclays and credit unions like the Hackney-based London Community Credit Union (LCCU) offer Islamic bank accounts.