Lloyds TSB was the first British bank to offer an account under Islamic Sharia law believing that consumers should not have to differentiate between cultural loyalty and traditional banking norms.

There are four basic principles which govern the accounts:

• The collection and payment of interest is prohibited. (The ideology of earning money without having to do anything is illegal under Sharia law)
• Only savings accounts earn interest.
• Profits (and losses) are shared between the bank and the customer at a predetermined ratio, as the notion of sharing is one of the founding theories of Sharia law
• Investment in companies that are considered unlawful or 'haraam' is prohibited (eg: companies that sell alcohol or pork - Armaments and tobacco companies are a grey area)

Both Lloyds and HSBC have a range of Islamic compliant services governed by the basic principles of Sharia Law. The Islamic Bank of Britain~ UK’s only standalone, Sharia’a compliant, retail bank.

Islamic accounts should not be chosen for their profit making credentials, as the comparable rates for regular savings accounts is nearly double (6% compared to 2.5-3%). On a more positive note, Islamic accounts do not incur the same bank charges as regular accounts. As the banks can’t profit from the charges, they are kept to a minimum and are simply there to cover the administration charge.