It will be the first time that Britain's 1.8 million Muslims will have access to banking facilities from a British bank which is wholly operated in accordance with Islamic Sharia principles.
Islamic Bank of Britain will be regulated by the FSA and will meet UK banking regulations and safeguards for the customer.
While there are other banks in the UK which offer products that follow Islamic principles, Sharia, all have their origins within non-Sharia conventional banks.
From Wednesday, IBB will be offering savings accounts through its Edgware Road branch and nationally via postal and telephone banking.
Current accounts and finance products will be available in November this year, with mortgages, credit/charge cards and small business banking accounts available in 2005.
Additional branches will open in Birmingham and Leicester in November 2004, with a further eight branches planned in 2005. Internet banking will be launched in April 2005.
Michael Hanlon, managing director, says: “We are delighted to be opening our first branch. It marks a new era in Islamic banking in the UK and the beginning of our work to broaden our product offering and branch network.
“The current additional capital raising taking place will provide funds to allow us to implement these important growth plans and we are confident that we can provide customers with a range of Sharia-compliant products and services. IBB products will be equivalent to those available in a conventional bank and competitively priced.”