Lloyds TSB launches Muslim bank account

Lloyds TSB launches Muslim bank account
LONDON: Lloyds TSB Group Plc has introduced a business bank account compliant with the Islamic law in all its 2,000 branches.

The bank said this will be the first business and corporate bank account conforming to the Shariah law, which forbids all forms of paying or receiving interest. The bank is targeting the special service at the nearly 100,000 Muslim business firms in the country as it has seen tremendous growth in Islamic mortgages and personal loans. The bank had already launched Islamic current accounts, student accounts and mortgage and investment funds in 2006.

The bank said there will be no interest component in the service to ensure that it meets all the Shariah rules. The bank will be ring-fencing the money received in the accounts and it will not be invested in certain industries like gambling or alcohol.

There are two separate accounts that will be offered under the service. Businesses with a turnover of up to 2 million pounds will be eligible to opt for the Islamic Business Account, while businesses with a higher turnover for the Islamic Corporate Account.

While there will be no interest payment and no overdraft facility, the account will offer other services available under traditional accounts like dedicated relationship manager, instant access to funds, no minimum balance requirement, a business debit card, check book and access to several online banking products.

Truett Tate, the bank's group executive director of wholesale and international banking, said Muslim businesses are making phenomenal contribution to the entrepreneurial spirit of the country through their creativity and incredible work ethic and the country is rapidly establishing itself as a centre of Islamic finance. "Lloyds TSB has been at the forefront of this growth."

Under Shariah law, making money simply from money, like interest, is usury and is not allowed. Instead, wealth should be created only through legitimate trade and investment in assets.