HSBC UK has come under fire for writing to Muslim organisations warning their bank accounts will be closed, in a move condemned as "Islamophobic".

The bank wrote to the Finsbury Park Mosque, think-tank the Cordoba Foundation and Bolton-based charity the Ummah Welfare Trust warning them that it would be closing their bank accounts and that they should not try and open other accounts with the lender.

The bank said decisions to close accounts were "absolutely not based on race or religion".

"We do not discuss relationships we may or may not have with a customer, nor confirm whether an individual or business is, or has been a customer.

"Discrimination against customers on grounds of race or religion is immoral, unacceptable and illegal, and HSBC has comprehensive rules and policies in place to ensure race or religion are never factors in banking decisions."

The founder of the Cordoba Foundation, who has also been warned his personal account is to close, along with those of his wife and children, said:

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"It is unsettling. I am not used to being addressed in those terms. It’s like I have done something wrong. The involvement of my family disturbs me. Why the entire family?

"I can only speculate – and I wish someone from the bank could explain. The organisations are mainly charities and the link is that many of them if not all of them are vocal on the issue of Palestine.

The trustees of Finsbury Park Mosque, which was led by extreme cleric Abu Hamza until 2005, said the letter from HSBC gave no reason for closing the account other than saying: "the provision of banking services… now falls outside of our risk appetite".

The mosque’s chairman Mohammed Kozbar said: "The bank didn’t even contact us beforehand. Didn’t give us a chance even to address their concerns.

"After the positive work we have done since taking over from Abu Hamza to change the image of the mosque, there is nothing really that can explain HSBC’s decision.

"They have put us now in a very, very difficult situation – this is the only account we have."

Meanwhile, a trustee of the mosque said the move was part of "an Islamophobic campaign targeting Muslim charities in the UK."

The Ummah Welfare trust also received a letter saying the provision of services was now outside HSBC’s risk appetite and gave the charity two months’ notice to make other arrangements.

The trust has distributed £70m ($118.5m) to projects in 20 countries and has had a humanitarian presence in Gaza for 10 years.

Mohammed Ahmad, who runs Ummah, says the charity has always been careful to stay within the law.

"We have always tried to work within a legal framework and accommodate banks, if, for example, there was an issue with sanctions".

Ahmad put HSBC’s decision down to Ummah’s work in Gaza, where he says the charity provides "ambulances, food aid, medical aid, and grants."

"We make sure we go out of the way to work with organisations that are non-partisan. What we do now is we do a check on Thomson Reuters and make sure that there is no link whatsoever with blacklisted organisations. We don’t want to damage our relief efforts. We have tried our best to be non-partisan as much as possible."

The UK government distanced itself from HSBC’s actions, saying it believed they were based on the lender’s independent risk analysis rather than on government action.

Meanwhile, Bristol-based entertainment troupe Circus Uncertainty were turned down for a bank account with Santander for quite another reason.

Joshua Morris, who owns the group, said he had gone to open a bank account in the hope of applying for government grants so he could run an entertainment scheme in Bristol for terminally-ill children.

But Santander described the outfits of the burlesque-style showgirls in the troupe as morally hazardous, although it declined to specify why their costumes were not decent and refused him a business account.

The company has a history of performing at Royal Academy of Arts, the Commonwealth Games, weddings, festivals including Glastonbury, schools, theatres and corporate events.

A Santander spokeswoman said: "We are committed to supporting the local business community and we are happy to review this account application following some clarification of the nature of the business. We are now in discussions with the business owner about his application and we hope to reach a positive outcome in the coming days.

"We are very sorry for any concern or inconvenience that our initial misunderstanding may have caused."

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