MANAMA, (Reuters) - Bahrain-based ABC Islamic Bank said on Monday, May 28, that it would launch the world's first interest-free Islamic credit card later this year.
The bank's Deputy General Manager Mohamed BuQais told reporters that the card will initially operate in Gulf Arab states and then in other Islamic countries.
Islamic banks and financial institutions do not pay or charge interest as it is considered by many Muslims as usury, which is banned under Islamic sharia law.
Islamic institutions make money by using a system of profit sharing from returns on approved investments.
ABC Islamic bank is owned by the Arab Banking Corp (ABC). BuQuais said the bank already had central bank approval to establish a separate company, known as the Islamic Credit Company (ICC), to issue and manage the credit cards.
ICC will issue two classes of shares, with A shares worth $3 million to be held by ABC Islamic Bank, while B shares would be offered to Islamic financial institutions, bank officials said.
The B shares, priced at $1 per share, are expected to generate between $300-$500 million, they added.
Bahrain, the Gulf's financial and banking hub, is home to more than 100 banks and financial institutions, including 46 offshore banking unit and around 18 Islamic firms.
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