Lloyds TSB has launched the UK's first account for Muslim students.

The account will not pay or charge interest, in accordance with Islamic (Shariah) law, and deposits will be held separately to other funds.

Students will receive the same benefits as a standard student account, including an interest-free overdraft of £1,500 for three years rising to £2,000 on longer courses.

Paul Sherrin, head of Islamic Financial Services at Lloyds TSB, said: "This student account is the first designed with Muslims in mind. 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.

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