To be confused by the Lloyds Islamic Account..

(18 Posts)

My aunt is Muslim and was telling me about a new bank account she's looking into, the Lloyds Islamic Account

www.lloydsbank.com/current-accounts/islamic-account.asp

From what I can read.. I can't see a difference from the usual current account, or am I being fick?

Any advice I could pass on to her regarding this would be appreciated btw, is it worth transferring from her current account etc

DocDaneeka Fri 02-May-14 20:17:52

I know bog all and I'm sure someone knowlgable will be along, but dosent sharia law specify you can't earn interest or charge someone for banking? So I guess that there won't be any economic advantage to the account but there will be a spiritual one?

squoosh Fri 02-May-14 20:18:42

Apparently it's Sharia-approved as Muslims aren't allowed to receive or pay interest under Sharia law. Their was some kerfuffle that non Muslims were being discriminated against as the Muslim accounts won't be charged if they go overdrawn.

Ehicardigan Fri 02-May-14 20:18:49

From my very limited understanding of it, I think one of the differences is that the account won't let you become overdrawn, which would go against Shariah law as its borrowing money. Aside from that, I'm not sure of the differences!

Ah thankyou! It seems a bit of a palaver for her switching accounts really if there's no real benefit from it.

Ploppy16 Fri 02-May-14 20:25:12

Would the money expert (that Martin chap) website have any information on it?

Ah good point ploppy thankyou I'll check. Just don't want her sucked into an account that seems fitting on the outset but isn't really that good IYSWIM

specialsubject Fri 02-May-14 20:36:27

the small print is that it doesn't pay interest (like many accounts) and it doesn't allow an overdraft (like many accounts). If the user doesn't have enough money to pay a bill, the bill won't be paid and Lloyds WILL charge a fee.

if the user does persuade Lloyds to give them an overdraft, there will be a flat fee of £6 a month.

guessing there won't be an overdraft then...

works because banking is free for most at the moment. If banking becomes chargeable for all (as it used to be) then things will get interesting.

in short, it is an account like many others and your aunt need not waste her time switching.

PeppermintInfusion Fri 02-May-14 20:49:11

I used to work in a bank, Muslims can ask for those same conditions to be applied to any current account- they just call up and the settings are applied, so not sure what the benefit would be if a dedicated account.

Thankyou special and peppermint I'll get her to have a look at this thread. Seems pretty pointless, just a way to get more customers I suppose!

WilsonFrickett Fri 02-May-14 20:52:17

It's just marketing. Lots of Muslims have bank accounts that aren't Sharia compliant - although as pepper says, that can be fixed with a quick call. So all this is doing is using standard account settings to try and attract more Muslims.

Infinity8 Fri 02-May-14 20:53:02

If muslims can't borrow money, what do they do about mortgages and financing for buying a new car etc?

specialsubject Fri 02-May-14 21:44:43

presumably they don't buy new cars, just save up less than £2k like many of us? (which I am quite happy with BTW!)

For houses, there are workarounds which create sharia-compliant mortgages. And indeed sharia-compliant savings accounts.

Islam isn't alone in this kind of thing. Someone mentioned a Jewish fridge on another thread (one that spookily won't open on Saturday). This is funny but not entirely a joke - there are all sorts of gadgets that enable observant Jews to live in the modern world 7 days a week.

infinity I think my uncle just picks and chose TBH, he'd go mad if he heard me saying that blush but he was willing to borrow money for his business but then complains about his religious law ha

crescentmoon Fri 02-May-14 21:53:11

Uncle or aunt op?

softlysoftly Fri 02-May-14 21:56:25

I think its slightly more than ju add t no interest charges.

Banks use our money while it is with them. They invest it to make profits that's how they pay interest.

This account promises that those investments will also be in line with Sharia Law.

So for example my money may be invested anywhere, the sharia bank account money will be ring fenced and only used in investments approved by the muslim decision makers they list. I'm guessing stuff like shares in Smirnoff of gala bingo will be avoided!

That's at a guess though.

My aunt asked about the account, my uncle is the one who owns they business. They are married crescent. Why do you ask?

softlysoftly Fri 02-May-14 21:58:57

Its actually quite clever because they will still be using those accounts to make money but won't have to pay anything out to them in interest and although they say they won't charge interest on negative balances they actually do via charges, flat fees and limiting overdrafts.

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