Sent the following to NAB after hearing they offer Shariah-compatible products:

To whom it may concern,
I have read that NAB offer Shariah-compatible products; a requirement of Shariah is that a percentage of profits be given as charity. I have several questions that I would like answered:
- does NAB comply with this charitable giving requirement?
- if so, what requirements must be met by the charities?
- which, if any, are the charities to which NAB donates profits from Shariah-compliant products?
Thank you for your time; I look forwards to your reply.
Yours,
Duncan Bayne

Will post their reply, if any, when it arrives.

Updated 24/11/2008: I received the following reply from NAB (anonymised, with long corporate email footer removed for clarity):

Dear Mr Bayne,

Thank you for your email, my name is Dennish and I appreciate you taking the time to contact NAB.

I understand your enquiry is relating to NAB Islamic Scholarship. Firstly, I'd like to say I'm sorry for not answering your email earlier than I had hoped.

I would like to help you with your enquiry.

I have personally included the following link because this will provide you with further information on Shariah Complaint Finance.

http://www.nab.com.au/About_Us/0,,90699,00.html

Once again, thank you for taking the time to email NAB. If you require any further information relating to your enquiry you can contact us directly on 13 22 65 or internationally on +61 3 8641 9083 between 8:00am and 8:00pm (AEST) Monday to Friday.

Yours sincerely,

XXXXX XXXXX
Internet Sales and Service Team

I sent the following in reply:

Dear Mr. XXXXX,

> I understand your enquiry is relating to NAB Islamic Scholarship.

Thank you for your reply, but no, my enquiry has nothing whatsoever to do with the Islamic Scholarship, and instead relates to your Shariah-compatible products & the zakat requirement. My original email contained the following:

> I have read that NAB offer Shariah-compatible products; a requirement of Shariah is that a percentage of profits be
> given as charity. I have several questions that I would like answered:
>
> - does NAB comply with this charitable giving requirement?
>
> - if so, what requirements must be met by the charities?
>
> - which, if any, are the charities to which NAB donates profits from Shariah-compliant products?

Are you able to answer those questions with the information available to you? If not, could you please direct me to someone at NAB who can?

Once again, thank you for your time, & I look forwards to your reply.

Yours,
Duncan Bayne

They replied very quickly ...

Dear Duncan,

Thank you for writing to me about Shariah compliant finance. I'd like to introduce myself. My name is XXXXX and I will be looking after you today.

Shariah compliant financial products and services allow Muslim consumers to participate in financial transactions in a manner that is in accordance with their belief system. Shariah compliant finance is a burgeoning market trend across the Middle East and Asia and is also growing rapidly throughout Western Europe and North America.

Please be advised that NAB does not currently offer Shariah compliant financial products.

If you would ever like to speak with one of my colleagues directly, please feel free to call us on 13 22 65 or internationally on +61 3 8641 9083 between 8:00am and 8:00pm (AEST) Monday to Friday.

Yours sincerely,

XXXXX XXXXX
Internet Sales and Service Team

... and I replied in turn:

Dear XXXXX,

> Shariah compliant financial products and services allow Muslim consumers to
> participate in financial transactions in a manner that is in accordance
> with their belief system. Shariah compliant finance is a burgeoning market
> trend across the Middle East and Asia and is also growing rapidly
> throughout Western Europe and North America.

Thanks, but I have a good understanding of Shariah compliant finance, & its particular requirements. My reason for writing is to enquire about the charitable giving (zakat) component - in particular, to find out which charities are benefiting from NABs investment in Shariah compliant finance, & (if possible) to what extent.

> Please be advised that NAB does not currently offer Shariah compliant
> financial products.

Perhaps I should be more specific. I read that that NAB has invested in excess of $30 million in a Shariah compliant investment fund in Singapore:

> http://www.islamicfinanceupdate.com/index.php?option=com_content&view=article&id=57
>
> "Approvals will make the NAB-managed trust the world's first Shariah-compliant industrial REIT and Singapore's first publicly
> listed Shariah-compliant REIT.
>
> Analysts said the industrial trust would get greater access to a new investor pool when raising capital or debt. The trust's current
> portfolio consists of 43 buildings, all of which are fully leased.
>
> ...
> Under the terms of the REIT management deal, NabInvest owns a 70 per cent interest in a joint venture company with Oxley
> Corporate."

Not being party to the specifics of the purchase, I'm not sure whether NAB itself pays zakat on the money it earns through the trust, or whether the trust pays zakat itself. But the substantial points of my original enquiry still stand:

- does NAB (or the trust) comply with the charitable giving requirement of Shariah compliant finance?

- if so, what requirements must be met by the charities?

- which, if any, are the charities to which NAB (or the trusts) donates profits from Shariah-compliant products?

Thanks for your prompt response, & I look forwards to your reply.

Yours,
Duncan Bayne

Updated 01/12/2008: It's been a week and I haven't received a reply, so I sent a follow-up:

Dear XXXXX,

It's been a week since I last emailed, but you haven't replied; is someone at NAB still looking into my enquiry?

Yours,
Duncan Bayne

Updated 17/12/2008: Still no reply, so I sent yet another follow-up:

Dear XXXXX,

It has now been longer than three weeks since your last reply. Do you (or any other NAB staff member) still intend to reply to my inquiry?

Yours,
Duncan Bayne

Updated 23/12/2008: I received a reply to my previous email, & hopefully I'll actually get some answers in the New Year:

Dear Duncan,

Thank you for your email, my name is XXXXX and I appreciate you taking the time to contact NAB.

I understand your enquiry is relating to the Shariah compliant financial products and services. Firstly, I'd like to say I'm sorry for not answering your email earlier than I had hoped.

I belive you would like to know details in how NAB have contributed to Shariah Complaint Finance. Expectation for response is at least 10 -14 days.

In order to fully investigate and assist you with the resolution of your concerns, we have today forwarded your details to the Customer Feedback and Resolutions Team. As you require specific inofmration

Our Customer Feedback and Resolutions Team will contact you upon the receipt and investigation of your concerns.

Should you wish to contact Customer Feedback and Resolutions directly please find the alternatives below:

...

Yours Sincerely,

XXXXX XXXXX
Your E-Mail Specialist Team

Updated 16/01/2009: Finally, a definitive answer: the reason for the delays is that they've refinanced the trust with non-Shariah borrowing:

Dear Mr Bayne,
Thank you for your inquiry, I apologise for the time taken to respond.

Information obtained in respect of your query indicate that with CIT's structure, a third of the assets of this group required conversion to be Sharia'h compliant. The investment vehicle was to be built on borrowings (Sukuk or equivalent) for the investment to become fully Sharia'h compliant.

This format was underway when NABInvest acquired its interest.

However the proposal to replace the trust's current funding with Sharia'h compliant borrowings has proved unachievable within the period remaining before the current debt requires rescheduling.

Accordingly, as recently announced, NABInvest are proceeding with a conventional refinancing of the trusts borrowings. The upshot of this means that until there are further changes to its debt structure, none of which are proposed in the short term, the trust will not have Sharia'h compliant borrowings and will not meet the criteria for membership of most Sharia'h indices.

Subsequently, a further requirement of full Sharia'h compliance is that any interest income be gifted to charity.

As there is no short term intention to make the trust's borrowings Sharia'h compliant. there is no intention, at this stage, to implement any such charitable giving programme.

As a result there is no record listing of charities or trusts within the current structure.

I trust this information clarifies the position NABInvest have taken at this time.

Yours Sincerely,

XXXXX XXXXX