Lloyds Bank 'Discrimination': Islamic Accounts No Longer Charged Overdraft Fee
Lloyd's Bank has come under fire for offering free overdrafts to Muslim customers only. The discriminatory move has been slammed by customers and industry watchdogs.
The bank, which is still owned in part by the British government following the bank bailouts of 2008, offers Islamic Accounts, Islamic Student Accounts and Islamic Graduate Accounts for Muslim customers who wish to have a Sharia-compliant banking service. As part of this, Lloyds is said to be removed charges on overdrafts, which may technically count as 'usury' under Sharia finance.
Customers were sent booklets this month outlining the changes to the processes, but Lloyds defended the move claiming: "These accounts are structured differently to our traditional accounts and do not offer credit interest or other features that are available on our other products. A comparison with the overdraft charging structure on other accounts is meaningless.”
The Telegraph reports that Lloyds customer, Anita Milton said: “I can’t believe that they’re thinking of offering one account for Muslims and making everyone else pay for the same service. Do I have to change my religion to get the best deal?"
Meanwhile, James Daley of the Fairer Finance consumer group, said: “The best thing would be for everyone to switch to the Islamic account to avoid these charges. But if everyone does that I doubt it will be financially viable for Lloyds.”
But a Lloyds spokesman said the accounts are not discriminatory as you don't have to be a Muslim to open one: “Our focus has always been on meeting the needs of UK businesses and personal customers. We offer a range of retail, business and investment products to meet the needs of our customers, available through all of our branches across the UK. The Islamic current account is for customers who cannot receive credit or debit interest due to their religious beliefs. All of our Islamic accounts comply with Islamic law and are available to anyone regardless of background or faith."