AMEInfo reports on a new product by the Royal Bank of Canada for Muslim investors.
The Royal Bank of Canada (RBC) has announced a new investment opportunitytailored specifically to meet the special requirements of Muslims.Available to Muslim-Canadian customers, the RBC Shariah-CompliantEquity-Linked Note has been introduced after an extensive period ofresearch and consultation, and is supported by a fatwah, confirming itssuitability, issued by three prominent Islamic scholars.
The note, which matures in approximately five and a half years, is thefirst of its kind in Canada, and is designed to provide a competitiveinvestment opportunity compatible with the precepts of Islamic law. RBCprotects the capital investment if the note is held to maturity, withpotential returns calculated using the percentage change in value of theunderlying equity basket.
"Stocks are selected from the Dow Jones Islamic Market Index, avoiding allharam (forbidden) sectors, such as arms, alcohol and pornography," saidAndrew Tice, Middle East regional director of the Royal Bank of Canada."Until now, Islamic investors had few attractive investment opportunitiesdue to the absence of low-risk investments following Shariah guidelines.With the RBC Shariah-Compliant Equity-Linked Note, they have acapital-secured, Shariah-compliant opportunity with a high growthpotential."
The Shariah Finance Group at RBC Capital Markets developed the initiative,which has been approved by three independent Shariah scholars. Theseexperts - Shaykh Nizam Yakuby from Bahrain, Shaykh Yusuf Talal DeLorenzofrom the United States, and Shaykh Dr Mohd Daud Bakar from Malaysia - areinternationally recognised as authorities on Islamic finance, and betweenthem advise many banks, governments and other institutions. All three areon the Shariah Supervisory Board of the Dow Jones Islamic Market Index.