Gatehouse Bank welcomes the launch of the Bank of England’s Alternative Liquidity Facility
Gatehouse Bank has warmly welcomed the Bank of England’s launch this week of a deposit facility designed specifically around the needs of Islamic financial institutions.
The Bank of England routinely takes deposits from UK banks but because the facility used by conventional banks pays interest, something not compatible with Shariah-compliant finance, UK-based Islamic banks have not been able to use this facility.
The Alternative Liquidity Facility (ALF) solves this problem, and Gatehouse has already begun to use the ALF to deposit funds. This is the first time a Western central bank has created a non-interest-based deposit facility of this kind. You can read more about the ALF here.
Danesh Mahadeva, Chief Financial Officer of Gatehouse Bank, said:
“The creation of a banking facility for UK Islamic banks is a significant step forward for Shariah-compliant finance and the Bank of England.
“Just as the UK has led the way as the first nation outside the Islamic world to issue Islamic bonds, known as sukuk, this will further cement the UK’s reputation as a global Islamic financial centre.
“Gatehouse can now deposit funds with the strongest and most trusted financial institution in the country, levelling the playing field for us within the banking sector.”