In July 2022, Australia's Muslim community got a headline it had waited decades for: the country's first Islamic bank licence, a restricted authorised deposit-taking institution authorisation granted to Islamic Bank Australia. Twenty months later, on 1 March 2024, the company handed the licence back to APRA without ever taking a customer deposit. The venture now operates as Islamic Money, is still raising capital, and is targeting home finance in 2026. Because this story is routinely garbled in community discussion, here it is from the published record, verified August 5, 2026.
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What actually happened
The company's own February 2026 progress update, signed by CEO Dean Gillespie, lays out the arithmetic. The plan needed $60 million: $20 million to build systems, which was raised and spent, and $40 million to launch, which was not raised. Most of the technology was built (the company says it holds a BSB and a SWIFT code and was almost at the point of testing with real customers), but the restricted licence pathway gives startups limited time to launch, and capital requirements loomed. On whether it breached them, the company is explicit: no; as soon as a breach became unavoidable on the trajectory, APRA was notified and the company voluntarily requested revocation, preserving its ability to reapply. Since only licensed entities may use the word bank in Australia, Islamic Bank Australia became Islamic Money. Its own website banner today says what a startup rarely says so plainly: we're not open, and we're not a bank yet.
What Islamic Money is now
Islamic Money Australia Pty Ltd holds an AFSL and Australian Credit Licence (534355) and AFCA membership, which permit financial services and credit activity but are not a banking authorisation. It has never held customer deposits, and nothing it offers carries Financial Claims Scheme protection (the government guarantee covering deposits up to $250,000 at real ADIs). Its only live offering is a waiting list. The planned product suite is published: an everyday account on a Wadiah structure, term deposits on Wakala with expected profit rates, and home finance on Ijarah. Its Shariah committee is genuinely heavyweight and named: Dr Elgari (a Dow Jones Islamic Index board scholar), Dr Hashim (Shariah Advisory Council of the Central Bank of Malaysia) and Dr Raashed, with product-level fatwas issued pre-launch, though the fatwa documents themselves are not published. The stated sequence: home finance possibly in 2026, because it fits under the existing credit licence, and the bank itself targeted for 2027, with 70% of the business claimed built. Every date is conditional on completing the $40 million raise that has been open for years.
The home finance plan, specifically
The published planned parameters are concrete for a product that does not exist: Ijarah with progressive ownership (buy shares of your property over time while paying rent on the remainder), finance from $50,000 to $5,000,000 over 5 to 30 years at a variable rental rate, initially capped at 80% of property value with expansion flagged, for purchase or refinance of established residential property, owner-occupied or investment, with penalty-free extra payments. The company says it aims to price competitively with big-bank mortgages. If that arrives, it would matter: rental-rate competition is exactly what the Australian halal market lacks, as our complete guide documents. But there are no rates, no fees, no eligibility criteria, no published fatwa document and no track record. A plan is not a product.
What this means for your decisions
If you need home finance now, proceed with the live market: MCCA, Hejaz, Amanah, ICFAL, Salaam and Ijarah Finance are operating today with named governance. Waiting for Islamic Money means betting your purchase timeline on a capital raise with no published close date. If you already have halal finance, keep Islamic Money on a watch list as a possible future refinancing option; every provider in the current market permits exit, mostly penalty-free, so a genuinely cheaper entrant would be usable when real. If you are considering investing in the raise, that is a venture-capital decision entirely outside this article's scope; note only that the company's candour about its status is a point in its favour, and that its website still carries leftover template content alongside real product pages, which is not. And if you encounter community rumours that the bank was shut down by the regulator: the published record says otherwise. The licence was returned voluntarily, ahead of a breach, with reapplication rights preserved.
The bigger picture
Australia's Muslim population has grown for decades (the census counted 604,000 Muslims in 2016, up from 281,000 in 2001, with a median age of 27), and the IFN industry press has tracked repeated waves of institutional interest: government studies between 2009 and 2012 that produced reports but no implemented reforms, big-four announcements in 2010 that went nowhere, and NAB's continuing niche work in Wakalah and Ijarah structures for larger property deals. Islamic Bank Australia was the boldest attempt yet to convert that demography into an institution, and its stumble was capital, not demand or regulation. Whether Islamic Money completes the journey or a better-funded successor does, the market it would serve keeps compounding. Meanwhile, the non-bank providers are the market, and they are better than they were five years ago. Compare them on the home financing hub.
Frequently asked questions
Is Islamic Money a bank?
No, and it says so itself. It has not been an ADI since returning its restricted licence to APRA on 1 March 2024. It holds an AFSL and credit licence (534355), has never taken a deposit, and offers only a waiting list today.
Did Islamic Bank Australia collapse or get shut down?
Neither, per the published record. It voluntarily returned its licence before a capital-requirement breach could occur, after raising $20 million of a $60 million plan. The company continues operating, renamed Islamic Money, and says it can reapply once funded.
When will Islamic Money launch home finance?
The stated target is 2026, ahead of a 2027 bank launch, but both dates depend on completing a $40 million capital raise. Planned terms are published ($50,000 to $5,000,000, 5 to 30 years, initially 80% LVR, variable rental rate); no rates, fees or applications exist.
Should I wait for it instead of using current providers?
No. Live alternatives with named scholars operate today, most with penalty-free exits, so you lose nothing by proceeding now and refinancing later if Islamic Money launches at better pricing. Betting a purchase on an unfunded launch date is not a plan.
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Would money with Islamic Money be government-protected?
Not currently. The Financial Claims Scheme (the government guarantee on deposits up to $250,000) covers only licensed ADIs, which Islamic Money is not since returning its licence. It holds no customer deposits today; anyone considering its capital raise is making a venture investment, not opening a bank account, and should evaluate it on those terms.