Lloyds bank Muslim bank accounts

Sg1642

After reading about these accounts that won't charge unplanned overdraft fees or allow one to be used I began to wonder if it has the potential to open the flood gates. And for a few reasons. (Not a dig at the Muslim population here so please don't turn it in to one)

Surely it could be argued that it is in some form discrimination if non Muslim people are deemed to be fair game for charges and secondly what is to stop non Muslims either claiming to be to try and get charges refunded or just to open these accounts in general? Obviously there is a returned transaction fee but there is a limit to what can be charged and it would surely be much cheaper than O/D fees?

dunstonh

Shariah financial services do not avoid any of the interest or charges that exist on comparable standard products. In simple terms, they get called something else and have certain features removed. It is just different packaging.

The reason they wont charge unplanned overdraft fees is that overdrafts are not allowed. They will charge returned fees. They operate on a nil strict basis (no discretion by computer or human to authorise when funds are not available - unlike normal current accounts).

Surely it could be argued that it is in some form discrimination if non Muslim people are deemed to be fair game for charges and secondly what is to stop non Muslims either claiming to be to try and get charges refunded or just to open these accounts in general?

No discrimination possible. Anyone can choose to have a Shariah bank account. You don't need to be muslim.

Obviously there is a returned transaction fee but there is a limit to what can be charged and it would surely be much cheaper than O/D fees?

Except there is no overdraft facility and its operated on a nil strict basis. It is still possible to get overdrawn with a certain selection of payments made. Hence the limited charging method that applies. However, the bank can withdraw facilities much quicker on a Shariah account than it can on a conventional one where there is abuse.