UK retail bank Lloyds TSB is to offer Islamic bank accounts compliant with Sharia law to Scottish customers following a roll-out of the product last year in England.
A panel of experts in Islamic finance advised on the creation of the account, which does not offer interest or an overdraft. Sharia law forbids the receipt or payment of interest on money. Funds held on behalf of customers will not be used for any interest-based business activities.
The first Islamic accounts in Scotland will be available this month in Glasgow, with plans to extend the offer to other branches. Paul Sherrin, head of Lloyds TSB’s Islamic Financial Services division, told the Scotsman newspaper: 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.
Islamic finance is a growing sector in banking as the demand for tailored Sharia-compliant products increases. Mortgages are already available whereby the bank buys the house chosen by the customer and then rents it back until the loan is repaid.