Diane Abbott says Tories are 'failing to hold bankers to account' for severing ties with Islamic charities

The call comes after Co-op Bank closed the accounts of pro-Palestine charities based in the UK

Abbott called for the Treasury to produce guidelines giving NGOs the right to obtain detailed reasons for any bank account closures (EPA)

Diane Abbott, the shadow Secretary of State for international development, has called for a code of practice to stop banks from severing ties with Islamic charities without explanation.

The call comes after Co-op Bank closed the accounts of pro-Palestine NGOs based in the UK.

“Once again this Tory government is failing to hold bankers and the financial services industry to account,” Abbott told the Independent.

She said the Treasury should produce guidelines giving non-government organisations the right to obtain detailed reasons for any bank account closures and the right to appeal.

"The bank closures damage existing work, hurt the reputation of these organisations and is a blow to hard working staff trying to help people in the global South," Abbott said.

The Co-op Bank is going to close the account of the UK-based NGO Friends of Al-Aqsa along with more than 20 other pro-Palestine NGOs, including the Palestine Solidarity Campaign.

The PSC has threatened legal action against Co-op Bank. A spokesperson said the organisation welcomed Diane Abbott's calls for guidelines.

"PSC operates within the law and yet we have been denied banking services with no reason and no way of challenging. The effect has been to damage our reputation, labelling us risky and suggesting that we fail “due diligence” checks without us even knowing what these claims are based on," the spokesperson said.

Co-op Bank said that it carried out due diligence checks on all of its customers, especially those operating in high risk environments, to make sure the accounts do not inadvertently fund “illegal or other proscribed activities”.

“Unfortunately, after quite extensive research, the charities involved did not meet our requirements or, in our view, allow us to fulfil our obligations,” a spokesperson said.

Ismail Patel, founder and chairman of Friends of Al-Aqsa, said Co-op Bank had refused to discuss the reasons for the closure.

“As a small organisation, trying to approach this is very difficult. The only means we have is public pressure,” Patel said.

Imran Madden, director of a UK-based disaster relief charity Islamic Relief, told the Independent he was “gobsmacked” when HSBC closed its account.

He echoed Abbott’s calls for the Government to step in and address the issue.

“As an international NGO that works on transparent principles, we’re gobsmacked, we don’t understand the reasons for it happening, we haven’t been given an adequate explanation,” Madden told the Independent.

Islamic Relief concentrates on responding to disasters and emergencies and has over 100 offices in 40 countries. Madden said that it suffered delays in buying tents during the Nepal earthquake because of bank checks.

HSBC severed ties with Islamic Relief in 2014, saying it found it difficult to continue their relationship because of the nature of their work, Madden said.

The decision to close an account comes after the bank has considered a number of different factors, including where the client operates, a spokesperson for HSBC said.

“Although we can't always be specific about why we decide to close an account, a decision of this kind is never taken lightly and is never due to the customer's race or religion,” the spokesperson said.

An HM Treasury spokesperson told the Independent that there needs to be a balance between cracking down on terrorist financing while being committed to the flow of aid.

He said any decision made by the Government must promote a pro-business stance to other countries while providing banking access for all.

“The government takes the issue of de-risking very seriously, and that’s why the Chancellor has ensured this issue is high up on the global agenda, including at the G20. It’s a global problem and so we must work together to find a global solution,” the spokesperson said.