Debanking crisis: Muslim charities 'unfairly targeted by banks' despite Farage scandal - 'Islamophobia!'

While Muslim organisations make up a small portion of the UK charity sector, Muslims donate more than any other faith group, the report found. The banking restrictions have led to severe humanitarian consequences, according to the MCF report.

One charity operating a hospital in a conflict zone was unable to pay its doctors and nurses for two months. Another organisation supporting Syrian refugee children with cancer in Turkey saw a payment delayed for a full year, severely impacting the timely delivery of care.

In another case, a charity received an eviction notice from a shelter due to delayed payments. These real-life examples were provided anonymously by charities interviewed for the research.

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Beyond immediate operational disruptions, the banking issues have damaged relationships with partners for 44 per cent of affected charities, the MCF report revealed. Delays in sending funds or account closures have led to breakdowns in trust with partner organisations.

Delays in sending funds or account closures have led to breakdowns in trust with partner organisations.

One charity described particularly dangerous consequences in the Middle East: "Because of these delays, local vendors would come to our field offices demanding payment at gunpoint, putting the lives of our workers at risk."

Having no bank account puts charities in breach of the law, yet they have no legal recourse when debanked.

Charities must defend themselves even without knowing why accounts are closed or transactions blocked. The MCF report identified five key factors behind the debanking of Muslim charities.

These include alleged Islamophobia and the "highly common" occurrence of charity workers' names appearing on terrorist lists. Risk-averse banking practices and operating in high-risk areas like Syria were also cited as major factors.

"Evidence suggests that structural Islamophobia plays a role, with Muslim-led charities often unfairly targeted by banks for perceived risks without concrete evidence of wrongdoing," the report's lead author Abdulsami Arjumand wrote.

The report recommends bank staff undergo anti-racism training to "avoid stereotyping or perpetuating racial and Islamophobic biases". Banking lobby group UK Finance has responded to the study's findings.

"We want the process of opening and managing a bank account to be as clear and straightforward as possible and welcome engagement from charity organisations," said David Raw, the body's managing director of commercial finance.

Raw confirmed UK Finance has contacted the Muslim Charities Forum to discuss the issues they are facing.

The organisation has recently launched a new guide for voluntary organisations to help with account management.

The organisation has recently launched a new guide for voluntary organisations to help with account management.

UK Finance stated that decisions to restrict or close accounts are only taken after careful consideration and based solely on regulatory compliance needs.

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Unlike several European nations, the UK provides no legal right to banking services.

Belgium, France and Italy all guarantee citizens' right to a bank account, but UK banks can refuse services to anyone.

This lack of protection echoes concerns raised by the Financial Conduct Authority (FCA) in September 2023.

The FCA highlighted a crucial policy question: "An important question for policymakers is whether all individuals, businesses and organisations should have the right to an account, as is the case in some other countries."