The Islamic Nostro account is claimed to be the first of its kind to be offered by a mainstream Western bank and is a Shariah compliant version of the account used by all banks to distribute payments to customers across the world. Whenever individuals or businesses send money to other countries, the payments are made from one bank to another and are passed through a Nostro account in the process.
The new Lloyds TSB account is designed to ensure that the UK’s two million Muslims and 100,000 Muslim firms can make and receive international payments without compromising their faith.
The Nostro account adheres to the principles of Islamic law, because it does not pay interest on money banks hold in the account; it does not provide an overdraft facility; and it does not allow any of the funds held to be invested in industries – such as alcohol and gambling – which are prohibited under the rules of the faith.
Diana Brightmore-Armour, CEO for corporate banking business and co-head of corporate markets at Lloyds TSB, said: We’ve designed this account to help the growing number of Islamic banks across the world, which deal with our customers’ transactions. We’re providing the missing link in the chain, so now any person or business receiving payments from abroad into their own Islamic account knows the money will be dealt with according to Islamic law, from start to finish.
