Islamic Bank Australia continues to progress towards launch as Australia’s first Shariah-compliant bank, with a special strategy week 15-17 November 2022 attended by a number of international directors meeting in Sydney where they decided to raise capital up to 40 million Australian dollars.

The bank was licensed in July this year as Australia’s Islamic bank, and is currently working towards a launch in early 2024.

The bank’s strategy week saw a number of key leaders fly into Sydney, including the founding CEO of the UK’s first Islamic bank, Sultan Choudhury.  Choudhury was made an Officer of the British Empire for his services in driving Islamic banking in the UK.

Choudhury was accompanied by Md Shaji Madathil, one of the bank’s largest shareholders from Dubai, and Moin Mahfuz, a barrister from London.  All are directors of the bank and have deep experience in Islamic finance.

Meetings at the bank’s head office in Parramatta involved major design walkthroughs with senior staff and directors as well as discussions about how to best ensure the bank could serve the needs of the Muslim community.

The week culminated in a dinner to celebrate the progress made in building the bank towards launch.

The bank continues to grow its customer waiting list, and is currently focusing on building key systems such as the core banking system and a mobile banking application that will provide a fantastic digital experience.

“We’re actually spending a lot of time building our customer experience and designing what we will look like.  It’s not just about being Shariah-compliant – we want to be a community bank that everyone loves banking with as well,” said Dean Gillespie, the bank’s CEO.

The Islamic bank has recently launched a capital raising round seeking to raise around $40 million in investment to move the bank towards full launch.  The bank is in discussions with a number of international Islamic banks and sophisticated local investors about raising funds.

“One of the reasons we flew our entire team to Sydney was to celebrate how much work had already been completed, and to plan out how we maintain our momentum,” said Gillespie.

“It’s fantastic that we have such supportive shareholders – all of us are completely dedicated to building the community a truly ethical bank.”

The bank has a team of people across NSW, QLD and WA working on making the bank a reality.

“We’re getting closer every day, but it’s actually quite challenging to start a bank – so we are very grateful for the messages of support, including people approaching us wanting to invest in our business.”

The bank’s CEO has also sought to drive regulatory changes in order to make it easier for Islamic transactions to take place.

Gillespie made a nationwide call for reforms on stamp duty directly to state and territory premiers and treasurers to ensure Muslim Australians are not double-charged stamp duty when they buy a home.

“I’m delighted that both the ACT and Tasmania wrote back to me confirming they would now exempt Islamic finance transactions from double stamp duty.  We already have exemptions in Victoria, and I’m meeting with NSW government over coming weeks to work with them also in making these changes.”

“These changes are massive and will make a difference for hundreds of thousands of Australians across the nation.  Muslim Aussies should not be penalised for banking in line with their faith, so it’s great we are making progress,” said Gillespie.

He said that the bank would continue to push for changes where required to make the financial landscape fairer for Australians of the Islamic faith.

Stamp duty reforms are regarded as critical to empower the growth of Islamic finance in Australia as Muslim Australians can be disincentivised from Joan ownership without reforms.

“We have to solve this issue.  Victoria, and even the UK, have solved this already.  I’ll keep pushing for these reforms,” said Gillespie.

The bank expects to launch with Shariah-compliant everyday bank accounts, savings products and home finance in 2024, with business banking coming shortly afterwards.

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