Lloyds TSB expands Islamic banking services

Mon, 14 Nov 2005

Islamic banking in the UK has been given a boost by Lloyds TSB, which announced that five of its branches will now offer Islamic banking services.

Muslim banking customers can now open Sharia-compliant current accounts at branches in Sheffield, Newcastle, Bastwell, Preston and Sparkhill in Birmingham.

Specially designed mortgages will also be available at these branches for the UK's two million Muslims.

Sharia is an Islamic law which forbids paying and earning interest – which, for Muslims, rules out traditional banking products.

Of adding the latest branches to Lloyds TSB's Islamic banking services, Paul Sherrin, the head of Lloyds TSB Islamic Financial Services, said: "There is now a real choice on the high street for Muslims who want an alternative to conventional current accounts and mortgages."

And not only do these products comply with Islamic law, they are also "truly competitive", Mr Sherrin adds.

The Sharia-compliant current account does not offer an overdraft or credit interest, but current account holders receive a debit card.

Lloyds TSB's Islamic mortgage does not involve the bank lending money to the customer in order to buy a property.

The mortgage lender buys the house – contributing up to 90 per cent of the price – and the customer takes responsibility for paying the remaining percentage upfront and repaying the rest over an agreed term.

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