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The
new Lloyds TSB account will be piloted in several cities across
the UK.
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LONDON,
February 17 (IslamOnline.net & News Agencies) – With an eye on
the sizable Muslim community in the country, a leading British bank
has launched a new interest-free checking account.
Lloyds
TSB Group Plc, Britain's fifth- largest bank by assets, is offering an
account that comply fully with Shari`ah (Islamic law), reported The
Guardian on Tuesday, February 15.
The
new account, to be piloted in cities across the UK, including
Birmingham and Luton, will not pay interest on credit balances or have
an overdraft facility, it added.
Under
Shari`ah, interest on bank accounts is haram
(unlawful) because such interest is an increase of money made without
effort or trade.
Islam
prohibits depositing one’s wealth and taking specified increase
without the risk of either loss or profit making.
Therefore,
the type of investment allowed is where a person deposits money in an
account and shares both the risk of making profit or losing.
Shari`ah
further forbids Muslims from receiving or paying interest on loans.
“Uncatered
for”
Gordon
Rankin, current accounts director at Lloyds TSB, recognized that the
Muslim community, estimated at nearly two millions, is “one of the
fastest growing in the UK and is very much part of the fabric of
British life.”
He
regretted, however, that the banking needs of British Muslims “have
been largely uncatered for and many British Muslims have often had to
bank in a way that is against their principles.”
Rankin
added: “Our research shows that over three-quarters of British
Muslims want banking services that fit with their faith.”
According
to The Guardian, has been particular concern among Muslims due to
receive the new child trust fund vouchers that there are no
Shari`ah-compliant products in which to invest the money.
Parents
have a year in which to decide how to invest their child's fund,
otherwise the Inland Revenue will automatically invest the money in a
stakeholder account, which could invest in companies that do not
comply with Shari`ah.
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“I
think all high street banks will take this route sooner or later
because there's a huge Muslim market in the UK,” said Mogra
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Ibrahim
Mogra, the chairman of the Muslim Council of Britain's (MCB) Mosque
and Community Affairs Committee, regretted that British Muslims have
had little choice but to use interest-paying accounts, reported the
BBC.
“What
the Shari`ah scholars tell us to do is whatever interest you gain you
get rid of it without the intention of gaining reward from God.
“Even
though at the end of the year I just take the interest out and give it
away, I've still, in a way, handled money from interest which I really
shouldn't be doing,” he said.
The
Muslim activists hoped other high street banks would follow Lloyd's
TSB's lead.
“The
high street banks want to hang on to their customers and now there is
an Islamic bank available they may be anxious they might lose their
customers.
“I
think all high street banks will take this route sooner or later
because there's a huge Muslim market in the UK,” Mogra said.
In
2003, HSBC banking group became the fist high street bank in Britain
to offer mortgages
and current accounts in accordance with Shari`ah.
A
year later, the Islamic Bank of Britain (IBB) became the first
Islamic bank to open its doors in the country.
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