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Islamic banking spreads across the UK

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Lloyds TSB is to start offering Islamic current accounts and mortgages through its 2,000 UK branches from Wednesday.

The bank has offered the products before, but only in a couple of branches. However, its customers will now be able to apply for the Islamic products in any of the bank’s branches, or over the telephone.

Under Islamic law (Shariah), interest is forbidden, however the bank’s new Islamic current account and Islamic mortgage, both comply with Islamic law, because they are designed to avoid any element of interest. Instead of charging interest, the Islamic mortgage works as the bank buys the house for the customer and the customer then pays that sum to the bank over a period of time to buy the house, the customer also has to pay an extra rental charge.

Paul Sherrin, Head of Islamic Financial Services, Lloyds TSB said: “Britain is home to a large and fast-growing Muslim community, but many have found that their financial needs have been left wanting.

“Having spoken to Muslims across the country we know that more than three-quarters want current accounts and mortgages that fit with their faith. By making these products available nationwide we’re bringing Islamic banking into the mainstream and we’re giving the Muslim community access to financial services that meet their needs without compromising their religion.”

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