New Islamic account for Lloyds

LLOYDS TSB has launched a new bank account enabling Muslims to transfer money around the world without breaking the rules of Islam.

The group claimed its Islamic Nostro Account was the first of its kind to be offered by a mainstream Western bank.

A Nostro account, complying with Shariah law, does not pay interest on money and does not offer an overdraft facility and it does not allow any of the funds held to be invested in industries – such as alcohol and gambling – which are prohibited under the rules of the faith.

CEO Corporate Banking at Lloyds TSB, Diana Brightmore-Armour, said: "Lloyds TSB has established itself as one of the leading providers of Islamic finance across the UK. But we are now seeing a rising demand, from Muslim businesses and personal customers, for Islamic banking across borders.

"We’ve designed this account to help the growing number of Islamic banks across the world, which deal with our customers’ transactions. We’re providing the missing link in the chain, so now any person or business receiving payments from abroad into their own Islamic account knows the money will be dealt with according to Islamic law, from start to finish."

Head of Operations, Bank of London and The Middle East plc, Simon Ratcliff, said: "This account is a real milestone for banks like ours and means we can give our customers reassurance that their money is being dealt with according to Islamic law, from the moment it leaves their account to the moment it reaches its destination."

The account adds to a suite of Islamic products and services Lloyds TSB has launched in the past two years, as it spearheads London’s drive to become a global centre for Islamic Finance. Last year, the bank launched a series of products including a current account, business and corporate account, mortgage and investment fund – each designed according to the principles of Islamic law.

The global Islamic financial services market is now worth an estimated $480 billion – and is growing at almost 15 per cent a year. As the range of Shariah compliant products and services widens, with developments such as the Nostro account, the market is expected to grow even further.