Wednesday, April 12, 2006
Scots Muslims offered bank service tailored to their needs
April 11 2006
Plans for the first banking service for Muslims offered by a major High Street bank in Scotland were unveiled yesterday.Lloyds TSB is launching a series of products compliant with Islamic Shariah law, which forbids followers of the religion from receiving or paying interest.They are now on offer at 30 Lloyds TSB branches in England, but the bank's first in Scotland will begin in Glasgow at the end of this month.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 condition of Shariah law.In order to comply with the religion, worshippers would have to remove any interest earned from the account and give it away.Lloyds TSB is also looking at devising a personal loan product which conforms to Islamic requirements, but a house finance service is already available.This entails the bank buying the house selected by the customer, who then rents it over a period during which the loan is being repaid."The repayment and rental payments are structured so as to be comparable with conventional mortgages," said Paul Sherrin, head of the bank's Islamic financial services division.The service will begin at the bank's Shawlands branch in Kilmarnock Road, close to the city's Asian community.There, at the moment, Muslims who follow their faith tend to borrow money from within their families or among friends.Amir Ali, 31, a retail manager, was checking out the new service yesterday and said he saw other advantages to the product besides religious compliance."I currently have a tracker mortgage and the payments go up and down with the interest rate," he said. "I think I might prefer a loan where the amount you repay is fixed over the term."A lot of Asians get cheap loans because they borrow from each other, but it means they have to keep a lot of money about the house. "My existing current account, with a debit card, pays interest but my wife makes me give it away to charity."
Posted by Editor at 2:14 AM