Islamic Relief shocked at HSBC withdrawing banking services

Islamic Relief have expressed surprise on social media at the withdrawal of their banking services by HSBC.

The following statement was issued on the charity’s website yesterday:

“We were in discussions with HSBC during 2014 through which we learned that the bank felt it would be difficult to continue its banking relationship with us due to the nature of our work,” says Imran Madden, Islamic Relief’s UK Director. “At this point they invited us to end the relationship – which they did themselves at the end of the year when we declined. We were told that HSBC needed to ‘manage the challenge’ posed by customers operating in ‘high-risk jurisdictions’, as a result of an obligation imposed on the bank in a Deferred Prosecution Agreement with the US authorities in 2012 to avoid prosecution for money laundering and dealing with pariah states.

“We were and remain extremely surprised at HSBC’s stance. We know that similar action has been taken by HSBC with other clients, so this appears to be generic risk-averse behaviour rather than something specific to Islamic Relief. Islamic Relief’s mission is to alleviate poverty and suffering where most needed, and that means we are committed to operating in complex conflicts where proscribed organisations are sometimes active. It appears that this is deemed a risk too far by HSBC but we continue to be trusted to deliver aid in such places by governments and by other financial institutions, and lives depend on our being able to do so.

“Islamic Relief shares concerns expressed across the charity sector and beyond that banks ‘de-risking’ their engagement with international humanitarian aid agencies in this way will end up either denying aid to those who need it in certain parts of the world or forcing NGOs to transfer funds in ways that are less transparent than bank transfers. The first of these would be plain immoral, the second unpalatable and counter-productive.

“Not supporting a civilian population who happen to live in a war zone is inhumane and unjustifiable. We believe that the breadth and vagueness of counter-terrorism regulation has created a fog of uncertainty for both banks and charities that governments need to do more to help us navigate our way through.”

“Islamic Relief has secured other providers for the services that HSBC was offering, and is still able to transfer funds and deliver aid in all of the places where it was working before HSBC’s action. However, like other charities working in difficult environments, Islamic Relief’s work has been hampered in some important ways by HSBC’s actions.

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“UK payments by Islamic Relief to others who bank with HSBC have been held up for weeks or even months – including a payment to procure tents urgently for earthquake victims in Nepal. A minority of donors who bank with HSBC have had donations to Islamic Relief blocked.

“No other UK bank has withdrawn facilities or means of online payment systems for UK businesses, and Islamic Relief is in regular dialogue with all its financial providers to understand any risk concerns and work with them to address any issues. Our key UK partners the Disasters Emergency Committee and the Department for International Development have been informed, as has our regulator the Charity Commission.”

HSBC has recently withdrawn banking services of prominent Muslim activists and Islamic charities linked to Syria and Palestine.

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