Barclays UK has come to an agreement with Somali remittance provider Dahabshiil over a legal row related to the latter’s account at Barclays.
The bank has agreed to keep Dahabshiil’s account with the bank open for a period of time, allowing the remittance company to find a replacement bank.
Dahabshiil said: "As part of the agreement, there will be a transition period to allow Dahabshiil to end its banking relationship with Barclays and move to alternative arrangements.
"In the interim, we are putting in place alternative arrangements which will avoid any disruption in service to our clients."
Barclays had tried to close the remitter’s account, citing concerns that the money was being used for money laundering and terrorism, but Dahabshiil was granted an injunction against the account being shut down.
Civil war has left Somalia with no functioning banking system, meaning that the country relies, for a large part, on remittances to the country, thought to be worth between $1bn and $2bn a year and exceed international aid.
Dahabshiil is Africa’s largest remittance provider and Barclays the last major bank to provide services to Somalian companies.
When the UK lender attempted to close the remittance provider’s account it faced opposition from the Somali government, Somali-born British athlete Mo Farah and the charity Oxfam.
The remittance company has now said it would work with the UK government and the British Bankers’ Association on plans to create a safe passage for payments made between the UK and Somalia.