Challenges Faced by Muslim Charities in the UK Banking System

Muslim charities in the United Kingdom are encountering significant obstacles in accessing banking services, particularly during the critical fundraising period of Ramadan. A report by the Muslim Charities Forum (MCF) reveals that over two-thirds of these organizations face difficulties in opening bank accounts, with 42% having their banking services completely withdrawn. This situation is exacerbated by stringent banking policies aimed at mitigating risks associated with money laundering and terrorism financing, often referred to as "derisking."

The Guardian

The MCF's chief executive, Fadi Itani, highlighted that these banking challenges disrupt essential charitable operations, particularly in crisis zones like Sudan, where timely financial support is crucial. Many charities report delays in aid payments due to banking issues, which can undermine humanitarian efforts. The report indicates that Muslim charities are disproportionately affected by these policies, with some organizations waiting up to three years to open accounts or facing sudden account closures without explanation.

The Guardian

Charities have reported that even benign references, such as "Syrian refugees," can lead to frozen transactions, hindering support for critical projects like cancer treatment for children in Turkey. Dr. Samantha May, a senior lecturer at the University of Aberdeen, noted that the fear of being flagged as high-risk prevents many Muslim-led charities from applying for necessary licenses to operate in sanctioned states, despite these areas often being in dire need of assistance.

The Guardian

Community leaders express caution in selecting charities to support, often limiting their contributions to organizations they trust. An administrator from an east London mosque indicated that they carefully monitor the charities they support during Ramadan to ensure proper use of funds. Razib Hasan, finance director at Muslim Aid, suggested that adopting legislation similar to that in France and Belgium, which guarantees the right to a bank account, could alleviate some of these challenges.

The Guardian

The Financial Conduct Authority (FCA) acknowledged the difficulties faced by charities in maintaining bank accounts and emphasized the need for banks to apply risk assessments proportionately rather than uniformly across all charities. The FCA has issued guidelines to this effect in 2024, aiming to improve the banking landscape for charitable organizations.

The Guardian

The challenges faced by Muslim charities in the UK highlight a broader issue of access to financial services for organizations operating in high-risk areas. As these charities strive to fulfill their humanitarian missions, addressing the barriers imposed by banking policies will be essential for maximizing their impact during critical fundraising periods like Ramadan.

The Guardian

• “These obstacles disrupt essential charitable operations and undermine the delivery of life-saving humanitarian assistance,” — Fadi Itani, Chief Executive, Muslim Charities Forum

The Guardian

• “Muslim-led charities must be able to operate without undue hindrance. Only then can their capacity to support vulnerable communities – in the UK and globally – reach its full potential,” — Fadi Itani, Chief Executive, Muslim Charities Forum

The Guardian

• “We know that some charities face real difficulties opening and keeping bank accounts,” — Financial Conduct Authority Spokesperson

The Guardian