UK Bank Offers Muslim Student Account

Muslim students will now be able to manage their money in compliance with the Islamic Shari`ah in any of Lloyds' 2000 branches in England, Scotland and Wales.

"This student account is the first to have been designed with Muslims in mind," Paul Sherrin, head of Islamic financial services at Lloyds TSB, was quoted as saying by Agence France-Presse (AFP).

The new account would allow Muslim students to manage their money in compliance with Shari`ah in any of the bank's 2,000 branches in England, Scotland and Wales.

"The Islamic student account is designed to give Muslim students access to banking services that until now have been at odds with their beliefs," the bank said in a statement.

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.

"In keeping with these principles, the new account will not pay or charge interest and customers' deposits will be kept separately to all other funds held by the bank," Lloyds said.

The bank worked with a board of Muslim scholars to design the account.

The student account will also be open to non-Muslims.

Fast-growing

Sherrin said that Muslim students were the fastest growing in the country.

"Britain's two million strong Muslim community is as young as it is fast growing, with more than half under the age of 25 - and of course many of these are studying."

The Bank official said that no Shari`ah-compatible accounts had been available for Muslim students in the past.

"Until today, however, young Muslim students have had no choice but to go against their beliefs by opening traditional bank accounts.

"By providing a real alternative that meets their financial and religious needs, we've made it possible for them to enjoy campus life without compromising their faith," Sherrin added.

Those opening the student account will receive all the benefits of Lloyds TSB's standard student account, including an interest-free overdraft worth 1,500 pounds (2,211 euros, 2,832 dollars) for three years, rising to 2,000 pounds for those on longer courses.

They will also receive gifts such as a free iPod Shuffle portable music player and one year's free Youth Hostel Association membership.

In June, Lloyds TSB began to roll-out its Islamic financial services across Britain, allowing British Muslims to open a Shari`ah-compliant current account in any of its 2000 branches.

The bank also allowed Muslims to apply for Shari`ah-compliant home loans.

Britain has pledged to become a gateway for Islamic finance and trade, giving impetus to efforts exerted by the country's sizable Muslim minority to that end.