Chandrashekar BhatBy: Chandrashekar Bhat
SEVERAL British Muslims have raised concerns about debanking making their access to financial services difficult.
Debanking became a hotly discussed issue after Brexit Party leader Nigel Farage claimed his account at private bank Coutts had been closed because of his political views.
While several people complained about their debits being declined banks, Cordoba Foundation also raised the issue after the charity failed to pay for an event organised in London last month on the political tensions in Tunisia.
“Multiple attempts to pay the venue provider and suppliers kept declining while payments from donors into our NatWest account kept being rejected,” Cordoba founder and CEO Anas Altikriti told Aljazeera.
Having an obligation to curb the criminal flow of money, especially after the 9/11 terror attacks in the US, banks have been increasingly closing accounts in the UK to avoid any regulatory actions.
Data obtained by Mail on Sunday showed lenders shut 350,000 accounts in 2021, compared to nearly 45,000 in 2017. In many cases, people affected by the lenders’ actions do not get any explanations.
According to the Financial Conduct Authority, one out of 50 adults in the UK is unbanked but in the case of Muslims, it is five times more – one in 10. This prompted the British Muslim Association to call for conducting a review to understand if Muslims are disproportionately impacted by debanking policies of banks.
But banks have been denying personal or political beliefs are reasons for the termination of accounts.
Chancellor of exchequer Jeremy Hunt said earlier this month that he had asked the watchdog to investigate the matter and suggested that banks which violated the law should be penalised.
However, FCA chief executive Nikhil Rathi said the increase in account terminations in recent years was driven by lenders’ anti-money laundering efforts.
In a letter to Hunt, Rathi said, “it is less clear the extent to which banks may be terminating accounts for other reasons, which may be unjustified and which, in some instances, may contravene the law,” Rathi said.
He said the watchdog would ask large banks and building societies to reveal the number of account terminations and the reasons behind the action.
The FCA would also seek data on the number of account opening applications refused.
Rathi said an initial assessment would be provided in September.
