Sharia Bank Accounts in UK High Street Banks

loveprada

Please can somebody explain to me how High Street banks such as Lloyds benefit from operating Sharia compliant bank accounts?
My concern is this: if I have a regular account with say Lloyds who run a sharia account, are they making a profit from these accounts or are we somehow subsidising them?

ColdIron

The Lloyds Islamic account is no longer available to new customers

Eco_Miser

They benefit by getting Muslim customers.
Since the accounts pay profit rather than interest, why would Lloyds be cross-subsidising them?

ColdIron

There are sharia accounts and there are sharia accounts. The current accounts provided by high street banks like Lloyds have no interest (credit or debit), overdraft facilities or charges. They also say your money will not be used for interest paying activities. I'd say on balance they were subsidising us and not the other way around and they benefit by having more customers they can cross sell insurance products to. Sharia savings accounts are usually run by Islamic banks and offer projected profits as a reward. Profit is just fine in Islam, it's not money for money. These will be run in accordance with their other business practises

greatkingrat

And by an amazing coincidence the profit they make is always about the same as the interest rate on similar accounts.

Owain_Moneysaver

greatkingrat wrote: »

And by an amazing coincidence the profit they make is always about the same as the interest rate on similar accounts.

It's not a coincidence, it's simple accountancy and economics.

With ordinary accounts the bank pays the customer interest, and what's left over is profit for the shareholders.

With sharia accounts the bank pays the shareholders what it thinks they deserve, and what's left over is profit for the account-holder.

longleggedhair

When in Rome, do as the Romans.....

Malthusian

longleggedhair wrote: »

When in Rome, do as the Romans.....

Eat dormice and vomit on the floor?

PeacefulWaters

loveprada wrote: »

Please can somebody explain to me how High Street banks such as Lloyds benefit from operating Sharia compliant bank accounts?
My concern is this: if I have a regular account with say Lloyds who run a sharia account, are they making a profit from these accounts or are we somehow subsidising them?

I'm not a namby pamby politically correct kinda guy.

But there seems to be more than a little underlying racism in your posting.

I believe a typical lloyds account pays interest. A Sharia account with Lloyds (albeit no longer available) doesn't.

Who's cross subsidising who?