LLOYDS TSB is extending its Islamic banking pilot scheme to Waltham Forest.

Shariah products are now available in the bank's Walthamstow High Street branch and are designed to meet the needs of the 33,000 Muslims living in the borough, who are forbidden from using interest-based banking.

Walthamstow Muslims join those in other areas with high Muslim populations such as Birmingham, Luton and Bradford in being able to access the accounts.

Gordon Rankin, Lloyds TSB Islamic Financial Services, said: "There is now a real choice in the high street for Muslims who want an alternative to conventional current accounts and mortgages.

"We're proud to be able to give these customers something we know that they will value.

"Both the Islamic account and Islamic home finance comply fully with Islamic law (Shariah), which forbids both the payment and receipt of interest, known as riba."

The bank offers a current account which does not offer interest when you are in credit but also does not have an overdraft facility or charge a fee for using the account.

It also offers a home finance product which is not based on interest payments.

Instead of lending money for a property purchase, the bank buys the home outright, contributing up to 90 per cent of the purchase price.

The customer then pays the remaining percentage upfront and repays the outstanding sum over an agreed term, together with a rental payment.

President of the Waltham Forest Islamic Association Qurban Hussain said: "There was only one Islamic bank in the City before so we welcome that.

"It will be much easier for Muslims. Some Muslims really don't want to buy a house because they can't get Shariah loans."

A Lloyds TSB spokesman said that the bank developed the accounts with the help of an independent board of specialist scholars.

Mr Hussain said that he thought Muslims would consult their imam to ensure that this was the case.