Connect with us


Lloyds TSB Threaten to Close Charity Account


The banking group, Lloyds TSB are forcing the Islamic Bank of Britain to close Interpal‘s account – a UK-based charity dedicated to helping poor Palestinians (which these days, constitutes most of the population of Palestine, thanks to Israel preventing fuel and food aid from entering Gaza).

The timing could not be worse: the notice comes into effect on December 8th 2008, i.e., around Eid-ul-Adha; a time when Muslims are encouraged to give in charity, so that the less fortunate can also partake in the festival of Eid. How will Interpal process Qurbani donations, if their bank account is closed? Was the date deliberately timed to be as heartless as possible, or is it just plain coincidence?

Keep supporting MuslimMatters for the sake of Allah

Alhamdulillah, we're at over 850 supporters. Help us get to 900 supporters this month. All it takes is a small gift from a reader like you to keep us going, for just $2 / month.

The Prophet (SAW) has taught us the best of deeds are those that done consistently, even if they are small. Click here to support MuslimMatters with a monthly donation of $2 per month. Set it and collect blessings from Allah (swt) for the khayr you're supporting without thinking about it.

Lloyds TSB are most likely responding to accusations that Interpal has ‘dealings’ with Hamas. This claim is currently under investigation by the UK’s Charity Commission (though they have not issued instructions for any assets to be frozen, as far as I am aware); the same commission has twice before cleared the charity of any wrongdoing, in 1996 and 2003. However, similar allegations actually lead to a ban on Interpal in 2003, both in the US and Australia.

Question: how is a charity meant to avoid interacting with members of a country’s democratically elected government? Especially in a place as chaotic as Palestine, where one needs to have good contacts at every level, in order to get anything done.

Another case of “guilty until proven innocent”, it seems. Except for the fact that the charity has repeatedly and consistently been proven innocent in the past.

The following is a copy of a message sent out by Interpal. Scroll to the bottom for details on how you can help, God willing.

Dear Friends,

Assalamu Alaikum – Peace be upon you.

I am writing to you because we are faced by a totally unexpected crisis which has the potential to force us to cease operations early next month.

We received notification the day before yesterday from our bank, the Islamic Bank of Britain (IBB), that Lloyds TSB (their clearing bank) have served notice on IBB to cease all dealings with Interpal. The notice comes into effect on 8 December 2008 (a nice Eid prsent!). After this time “all transactions into or out of Interpal accounts will be blocked and IBB will be at further risk of all its customer payments being suspended.” IBB has offered us its 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 also to affect community relations (and cohesion) in Britain. The bank hasn’t even waited for the Charity Commission to publish its latest report on Interpal.

No reason at all is given for this draconian and punitive measure, taken without any consideration for the thousands of contributors who have placed their faith in us to assist the needy of Palestine – and who want to continue to do so. Needless to say, it will be an administrative nightmare to transfer the thousands of standing orders that we have, etc.

By acting in this way, Lloyds TSB has treated IBB with contempt. Their action sends a signal to other Muslim charities – as well as the bank’s 50,000 Muslim account holders – that their accounts can be closed down without warning or explanation at any time.

It is, at the very least, an example of the utter lack of respect faced by the Muslim community from some hostile quarters in this country.

Perhaps it should be pointed out to Lloyds TSB that Muslims are among the British taxpayers who have bailed out the bank after years of wasteful mismanagement!

Be that as it may – we are less than a month away from a potentially very difficult and testing situation. We are currently mobilising all the support we can to try to persuade the banks to rescind this decision – and hope and pray that we can look to you for guidance, advice and practical support at this critical time.

We are calling upon our friends and supporters, and all who stand for justice in the face of oppression to contact Lloyds-TSB and the Islamic Bank of Britain to ask them to rescind this outrageous, unfair and arbitrary decision.

Your support in this will be much appreciated.

Many thanks.

Ibrahim Hewitt
Chairman of the Board of Trustees


Call Lloyds TSB to ask them to rescind this outrageous, unfair and arbitrary decision.

Bulat Betalgiry,
Tel: +44 (0) 20 7661 4778

Islamic Bank of Britain plc,
Tel: +44 (0) 121 452 7330 / +44 (0) 845 6060786

Or write to them – if you don’t have time use this template below:

Dear Sir/Madam

I, … am outraged at the news that Interpal, the only UK Charity supporting the oppressed people of Palestine, has been asked to clear all funds and has been threatened by Lloyds TSB to have their account closed, without good reason.

I am also shocked that a well-known bank, such as yourselves would not even await the findings of the current Charity Commission investigation into Interpal which is due shortly.

I demand that Lloyds TSB take into consideration our values and provide a reason for these actions, and withdraw threats made to the charity.

I look forward to your response.

Thank you


Send your letters to:

Bulat Betalgiry,
Lloyds TSB Bank plc,
1st Floor,
25, Gresham Street,

Islamic Bank of Britain plc,
Edgbaston House,
3, Duchess Place,
Hagley Road,
B16 8NH.

Keep supporting MuslimMatters for the sake of Allah

Alhamdulillah, we're at over 850 supporters. Help us get to 900 supporters this month. All it takes is a small gift from a reader like you to keep us going, for just $2 / month.

The Prophet (SAW) has taught us the best of deeds are those that done consistently, even if they are small. Click here to support MuslimMatters with a monthly donation of $2 per month. Set it and collect blessings from Allah (swt) for the khayr you're supporting without thinking about it.

Dr Mehzabeen b. Ibrahim joined MuslimMatters as a blogger in late 2007 under the handle 'iMuslim', whilst still a struggling grad student. Since then, she has attained a PhD in Molecular Biology and a subsequent Masters in Bioinformatics, and now works as a specialist in this field for a well-known British, medical charity, masha'Allah. Somewhere in between she found the time to get married, alhamdulillah. She likes to dabble in photo and videography, a sample of which can be found on her personal blog:



  1. Pingback: Lloyds TSB Threaten to Close Charity Account « iMuslim

  2. iMuslim

    November 15, 2008 at 6:37 PM

    As a customer of IBB, I am quite dismayed at their inability to do anything for Interpal. I don’t blame IBB directly, but surely they can do something?

  3. Yusuf Smith

    November 15, 2008 at 6:42 PM

    As-Salaamu ‘alaikum,

    Perhaps it should be pointed out to Lloyds TSB that Muslims are among the British taxpayers who have bailed out the bank after years of wasteful mismanagement!

    Perhaps it shouldn’t, because as far as I remember, LTSB haven’t been bailed out. In fact, LTSB are taking over HBOS (Halifax / Bank of Scotland), possibly with government assistance, which has failed for the usual reasons for which several other banks have failed recently.

  4. Yusuf Smith

    November 15, 2008 at 6:53 PM

    As-Salaamu ‘alaikum,

    iMuslim: perhaps they can take their business to another clearing bank, like Barclays? I wonder why they cannot become a clearing bank themselves, rather than relying on a usurious company like LTSB.

  5. Aadam Harwood

    November 15, 2008 at 8:30 PM

    I think this is basically a case of “Islamic” Bank of Britain not bothering to support Interpal. After all, IBB is a customer of Lloyds TSB, so IBB is PAYING them to use their clearing services. And so IBB could easily say “You can’t bully us. We’re just going to use another bank to do our clearing and pay the fees to someone else!”

    Lloyds TSB would quickly change their tune if IBB showed any courage in support of their Muslim brothers and sisters in Palestine, instead of threatening their Muslim brothers and acting as the lapdog of the Kafir bankers in such a cowardly way. It’s very clear that IBB probably have an ulterior motive for going along with Lloyds TSB’s request. They probably think Interpal is too much trouble for them. Or they are not making enough money out of Interpal. (That’s right – not making any money from the humanitarian charity that’s helping NEEDY Palestinians!!!)

    So while you’re complaining to Lloyds TSB about this (and you should be!) make sure you also complain to the “Islamic” Bank of Britian, and tell them that if they are not prepared to support their own Muslim brothers and sisters in Palestine then we do not consider them to be “sharia compliant” and we will be closing our accounts and telling every other Muslim we know to do the same thing. If you want the Ummah to support you then you need to show support to the Ummah in it’s times of need. If you turn your back on the Ummah (which is what IBB is doing) then the Ummah will turn its back on you.

  6. Organica

    November 16, 2008 at 6:31 AM

    Ina lilah we ina ilyhe rajooon.

    Hasbona Allah we na3ma il Wakeel!

  7. H

    November 16, 2008 at 7:44 AM

    As Aadam alluded to that the power lies with IBB. If they want to put pressure on Lloyds and move their business from there then Lloyds would think twice. It does seem quite strange that IBB could be held to ransom like this. As far as IBB’s products being Islamic then thats another story.

  8. Yusuf Smith

    November 16, 2008 at 4:47 PM

    As-Salaamu ‘alaikum,

    Today I attended a meeting in London with the new ENGAGE group (see here) and we discussed the LTSB/IBB/Interpal situation. Basically, LTSB is one of a small number of “clearing banks”, and they have the right to unilaterally refuse to clear any transaction. They are the banking equivalent of an internet backbone: much as an internet backbone can refuse packets (bits of data) from any source for any reason (often because of spamming), a clearing bank can refuse to clear a transaction for any reason. One of the ENGAGE guys told us that LTSB were doing this because of international pressure, i.e. American pressure, because Interpal are still legal in the UK, and the Bank of England could have put a stop to any charity if there was grounds to suspect them of supporting terrorism, but there is none. Interpal has been investigated twice in the UK, and cleared both times, as is widely known.

    I am still at a loss to what I might do in response. I do not know if I could take my business elsewhere, because my capital levels are so small, and I started my Lloyds account as a student as part of their student account deal. At the time, I did not want to go to Barclays because of an incident in which a couple borrowed large amounts of money from them under one manager, which a new manager decided to recall immediately, which led to ruinous legal action for that couple. At the end of the day, usurers are usurers. They are all scumbags.

  9. Aanika

    November 16, 2008 at 5:38 PM

    I urge all British muslims to write to Lloyds TSB, don’t underestimate the power of popular pressure.

    If you want to hit them hard, contact the cheif executive

    Eric Daniels
    Cheif Executive Lloyds TSB Bank plc
    25 Gresham Street
    EC2V 7HN

    Ask him to reverse the decision and if they don’t listen then move your account and tell everyone else to do the same.

    We are NOT going to let them get away with this insha’Allah.

  10. iMuslim

    November 16, 2008 at 11:33 PM

    Wa ‘alaykum salam wa rahmatullah

    I asked my father today why IBB can’t become a clearing bank. The summarised version of his answer was:

    All cheques in the UK are cleared via the Bank of England. You can only clear cheques through them if they have assigned you ‘clearing bank’ status, and have granted you an official sort code. Select criteria mean that most smaller banks, like IBB, would not be eligible for clearing bank status, forcing them to go via the long-established, big banks, like Lloyds TSB, Natwest, etc, to access the BoE’s cheque clearing facility.

    I imagine a month (now less than that) might not be enough time for IBB to change clearing banks, and even if they did, there is no guarantee that the new institution would not do the same thing (unless this was agreed beforehand, perhaps?). I do suspect IBB’s hands are tied in this respect, which means we have to concentrate on Lloyds TSB, and see if there is anything we can do in the legal department, insha’Allah.

    I have no particular ideas though… I pray that someone else does.

  11. Zee

    November 19, 2008 at 4:55 AM

    banks would never listen to our unless hit financially i.e. switching our accounts
    this has happened in the past when NATWEST closed Interpal bank account , was any action taken that time?
    what was their response that time?

    Inna lillah hee wa inna elay hee rajeyoon!!!!

  12. B.Aujeemuddee

    November 20, 2008 at 9:05 AM

    We are really shocked to hear the news yesterday, on islam channel. As muslims we must never give up, we should put our trust in Allah and keep trying , The test is getting harder, but inshah Allah we need will be successful. If we all unite, for Allah’s sake, no matter what kind of difficult, inshah Allah , there will be ease. We should unite to stop this oppression and inshah Allah I hope Allah will make us
    find a better solution, where muslims will follow the Quran and stop taking and helping those who deals with usury. Instead we should
    stop all transaction with bank dealing in usury and look for halal places.

    • ben

      May 23, 2013 at 8:34 PM

      what comments for someone who forgets his past.
      I am your past. don’t forget .for years I listen to your heart you know it’s your
      promise . I a lot to tell you from my soul. if you repond to my email I had a lot to tell you . thanks in advance yous.
      from mohamed

  13. R Rehman

    November 20, 2008 at 8:26 PM

    Lets not thow baby with the bath water

  14. Abu Abdurrahman

    December 19, 2008 at 1:35 PM


    Assalamu alaykum wa rahmatulah

    Does anyone know if/how Interpal’s problem has been resolved ie what there current course of action is, etc.?

    Apparently Barclays Bank has given the well known Muslim charity, Ummah Welfare Trust, 30 days’ notice until their bank accounts are to be closed.

    Apparently they’re claiming some commercial reasoning?

    It seems like another case of Islamophobia within the banking sector…. another attack against the Muslim community.

    Does anyone know who we can/should write to?

    JazakumAllahu khairan

    Wassalamu ‘alaykum wa rahmatullah

Leave a Reply

Your email address will not be published. Required fields are marked *