The race is well and truly on to provide viable banking options for followers of Islam. There are some 1.6 million Muslims in the UK, many of whom are reliant on products that are compliant with Sharia law.

Sharia requires that financial products do not pay or receive interest and includes a provision that products can only invest in suitable companies. It also prohibits any dealings with so-called vice industries such as alcohol and gambling.

The latest example of this growing financial market was when the Government announced that it is looking to launch Islamic-compliant bonds.

You can however already get your hands on Islamic bank accounts, savings products and mortgages. But this is the first time the Government has entered the market.

Sharia products are meant to focus on 'productivity' rather than raw consumer spending, so for example loans will normally only be approved for the purchase of a house, car or other asset as opposed to splashing out on a holiday or shopping spree.

Experts reckon the Islamic banking market is worth some £40 billion globally, and it's growing fast.

What are your options?
A practicing Muslim cannot put their money in a standard current account as it will earn interest, even though research shows scores of accounts only pay out 0.1 per cent on credit balances.

Lloyds TSB offers an Islamic Account - there's no interest paid and you won't get an overdraft either, but thankfully you will get a debit card so you don't have to carry cash everywhere.

Lloyds TSB also holds all its Islamic funds in accordance with Islamic law - they won't invest your cash in industries that contravene Sharia law.

Mortgages
Lloyds TSB are leading the way with mortgages, too. Their product, called Islamic Home Finance, uses a special mode of borrowing in order to comply with Sharia.

HSBC also offers a similar product from its HSBC Amanah arm - HSBC Amanah buys the property jointly with you and then your home is held by a third party on trust until you sell. In the meantime you enter into a leasing agreement with HSBC in which you will essentially pay rent.

Child Trust Funds
Finally it can also be difficult for followers of Sharia law to invest their money without breaking the Muslim code. Muslims are not supposed to profit from industries such as tobacco, alcohol or gaming, and this means that the choice of stakeholder Child Trust Funds (CTFs) can be limited.

A company called The Children's Mutual has developed a CTF specifically to cater for the Islamic banking market. The Shariah Baby Bond invests in shares that are not linked to industries or companies banned by Sharia law.

The information in this article was kindly contributed by MoneyExpert.com, the independent UK financial services comparison website.