Lloyds TSB to offer country's only Islamic bank accounts

Published on Monday 10 April 2006 13:46

THE first mainstream banking facilities for Muslims in Scotland were set to be unveiled today.

Lloyds TSB is launching a series of products compliant with Islamic Shariah law, which forbids followers of the religion from receiving or paying interest.

The bank's managers consulted a panel of specialist scholars before launching the accounts south of the Border last year.

They are now on offer at 30 Lloyds TSB branches in England, but so far none in Scotland.

This month the first Islamic accounts will be offered to customers north of the Border, with an initial roll-out in Glasgow.

The Islamic current account offers no credit interest and has no overdraft facility, but it does provide a debit card.

Funds held on behalf of customers are also invested solely in ethical companies - a further condition of Shariah law. Before the accounts came into existence, the UK's estimated two million Muslims had little choice but to use interest-bearing and charging accounts.

In order to comply with the religion, worshippers would have to remove any interest earned from the account and literally give it away.

The first UK-based specialist financial institution - the Islamic Bank - was opened in 2004 but has no branches in Scotland.

Other divisions of international banks offer Islamic-tailored mortgage and investment services.

Paul Sherrin, head of Lloyds TSB's Islamic Financial Services division, said: "Islamic banking is only just beginning in the UK. We want to give people the chance to air their views and ask questions of our panel of experts."

A spokesman for Lloyds TSB Scotland confirmed that Islamic facilities would be available by the end of this month. "If we get good take-up, our ambition is to make them readily available across the whole network," he added.