Lloyds TSB to offer Sharia-complaint business accounts
by Elaine Frei
Lloyds TSB (LSE: LLOY) will become the first UK bank to offer business accounts that meet the requirements of Sharia law. The bank will offer the new accounts to Islamic business owners at all of its branches in addition to other Sharia-compliant accounts, which it began offering in 2005. With at least 10,000 businesses owned by Muslims in the UK, there is clearly a market for this new product.
In order to comply with Sharia law, under which any form of making money from money is forbidden, accounts must not accrue interest. In addition, the money in such accounts cannot be used by the bank to invest in industries which the Muslim body of law considers unethical. This would prohibit investment in such areas as alcohol, tobacco, gambling, and pornography.
Many Muslim business owners have traditionally kept their money out of mainstream financial institutions in the UK because the accounts they offer have not complied with Sharia law. Sharia law is based on the Qur’an and on Muslim tradition, and regulates many public and private aspects of life for the observant Muslim.
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