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Interpal meets Treasury, while another Islamic charity account is closed

Finance | Vibeka Mair | 14 Jan 2009

Trustees of the UK-based Palestinian charity Interpal met representatives from the Treasury last month to protest about Lloyds TSB’s move to cut off the charity’s bank account.

The trustees met Lord Myners, financial services secretary to the Treasury, at their request to complain about the fact that Lloyds TSB has stopped clearing Interpal’s cheques presented through the charity’s bank, the Islamic Bank of Britain.

A spokeswoman for the charity said the meeting did not bear any real fruit. “All levels of government know about the situation but still nothing is being done,” she said.

Short-term workaround

However, she added that an interim solution had been found – the Islamic Bank of Britain has been able to transfer funds overseas for Interpal via other means. “They found a way to work around the service that Lloyd’s had been providing. We know this has been successful because we have spoken to people on the ground in Palestine.”

However, Interpal still needed a long-term solution to the problem.

A spokesman for the Treasury said the government wasn’t getting involved “at this stage”.

“At the moment it is just a commercial matter for the bank,” the spokesman said. However, he added that “not everyone that asks for a meeting with a minister gets one”.

Barclays closes Ummah Welfare Trust account

Elsewhere, Barclays Bank has decided to close the account of humanitarian charity Ummah Welfare Trust (UWT), an Islamic charity which works in 20 countries worldwide including Afghanistan, Palestine and Pakistan.

Barclays Bank has refused to give the charity a specific reason. UWT director Mohammed Ahmed said Barclays simply told him “it’s because of risk exposure.”

However, Ahmed added that the Charity Commission, who has met with UWT (pictured) to discuss Barclays’ decision, told him it would request a reason from the bank on the charity’s behalf.

UWT, which gets much of its income from regular givers, will now face extra costs to tell donors to change the details of their direct debits or standing order.

The charity also fears it will lose donors who will not want the hassle of setting up a new standing order.

Dangerous precedent

Barclays added an extra 21 days to UWT’s original 30-day notice on the account closure after the charity complained that it didn’t have sufficient time to deal with all of its direct debits and standing orders. Ahmed, however, believes the charity still does not have adequate time.

UWT is now looking at its options and considering a campaign.

“This decision sets a dangerous precedent of disrupting British charities without any substantiation,” said Ahmed. “This decision will not only affect the great work carried out by UWT but will affect millions of people who rely on UWT.”

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