The Birmingham-based Islamic Bank of Britain has been ordered to suspend the accounts of a charity linked to terrorist group Hamas.
The bank is believed to have been told by clearing bank Lloyds TSB to cease dealings with UK-based Interpal, in what the charity claims is a blow to the independence of Britain’s nascent Islamic finance sector.
Interpal, known as the Palestinian Relief and Development Fund, has been investigated by the Charities Commission over allegations it was providing money to terrorist organisation Hamas, the de facto government in the Gaza Strip.
The group has never been found guilty of any illegal activity in the UK, although it is on a list of proscribed groups in the US. This is believed to be why Lloyds – which has extensive US operations – does not want to be connected with Interpal.
Interpal said dealing with Hamas is the only way to get aid to needy people in the Gaza Strip. It vehemently denies any connection with terrorism.
The Charities Commission is investigating Interpal. It has investigated twice before, in 2003 and 1996, both times clearing the charity. A spokeswoman for the Commission said it couldn’t comment on the case but a report was expected soon.
In an email to supporters, Interpal said: “Islamic Bank of Britain has offered us total support but is apparently powerless in this situation, throwing into question the autonomy of Britain’s burgeoning Islamic finance sector.
“As you can imagine, this has the potential not only to damage Interpal but to affect community relations and cohesion in Britain. The bank hasn’t even waited for the Charity Commission to publish its latest report. No reason at all is given for this draconian and punitive measure, taken without any consideration for the thousands of contributors who placed their faith in us to assist the needy of Palestine – and who want to continue to do so.”
The Islamic Bank of Britain, on the Hagley Road in Edgbaston, is the UK’s only stand-alone fully Shariah-compliant retail bank. It was set up in 2004 to deal with thousands of customers whose faith prevented them banking with institutions that paid or charged interest.
They are understood to have been told by Lloyds, a clearing bank for its transactions, it has to cease dealings with Interpal by December 8. This is coincidentally the same day as the start of Eid-ul-Adha, one of the largest festivals on the Muslim calendar. Interpal had planned to use the day to make a push for more funding from donors.
Sultan Choudhury, the commercial director at IBB said: “Islamic Bank of Britain respects the confidential nature of the relationship with our customers, and has a policy of not commenting on the affairs of any individual customer. We respect all of our customers.”