Austria: Bawag to offer bank accounts governed by Sharia law

An Austrian bank will offer the country's first current account governed by Sharia law in February. Bawag PSK, whose majority owner is US-based Cerberus Capital Management LP, will be introducing three versions of the Sharia account.

The accounts will not pay or charge any interest and will instead charge a fixed fee, Bawag's head of marketing Claudia Lemlihi said. Customers will pay a fixed amount of €4.90 (£3.74), €11.90 (£9.09) and €34.90 (£26.67) a month for the account, debit card and overdraft facility.

The account holders will be prohibited from transacting business with companies that deal in gambling, alcohol, pornography and weapons. As usury is prohibited under Sharia law, banks cannot charge fees or interest for money lending. Due to this restriction, account holders will not be able to take home loans. Instead, the bank will buy the home for their customers and resell it to them for a profit, while allowing them to pay back the sum in installments.

The accounts, named Amana, have been specifically created for Muslims living in Austria, Lemlihi said. An estimated 600,000 Muslims, about 7% of the population, live in Austria.

The bank has been criticised for its move to introduce Sharia accounts. People said the move would give preferential treatment to Islamic customers. The bank, however, has denied the allegations and said anyone can open a Sharia bank account.

According to The Independent, the bank on its Facebook page wrote: "Dear Community, we are open for your questions and comments on our wall. Nevertheless, we ask you to keep our netiquette - among other things, radical, extremist, racist, sexist, or political statements, insults, threats, or personal attacks postings. Friendly Greetings, your bawag p.s.k. facebook [sic]."