Officials say 300 UK-based charities have had their bank accounts closed in the last two years after being caught up in a global crackdown on illegal money flows.

Britain’s Charity Finance Group, that helps to organise charity financing, told Reuters that thousands more charities have had operations disrupted by delayed payments causing financial losses and risks to employees.

The finance droup said told Reuters that major charities Oxfam and Save the Children say they were amongst those hit.

The government is setting up a panel of charity executives, bankers and officials to meet in the coming months to “drive new policy thinking” to allow legitimate charities to operate unhindered, an official told Reuters.

The decision to assemble the working group comes ahead of a review by the inter-governmental Financial Action Task Force (FATF) March 2018 of Britain’s efforts to tackle money-laundering and financing of militant groups.

At the FATF meeting, Britain could face criticism of its failure to tackle the problem of charities losing access to the banking system, charity sector analysts said.

The FATF has recorded over 100 cases worldwide of alleged abuse of charities for terrorist finance.

In one example in the city of Birmingham in 2011, three people were convicted of impersonating Muslim Aid charity workers to fund a bomb attack.

Legitimate charities say they have been cut off from the financial system because banks have been alarmed by billion-dollar fines meted out for breaching sanctions, anti-terror financing and anti-money laundering rules.

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Charity officials say the clamp-down on charities by banks is causing government-backed aid efforts to fail, humanitarian workers to be put at risk and potential recipients to suffer.

“Save the Children believes a more aligned approach between governments, regulators, and NGOs will help to reduce financial crime, whilst ensuring critical and life-saving humanitarian work continues,” the group said in a statement for this article.

HSBC and Co-Operative Bank closed the most charity bank accounts in the last two years, according to a Reuters survey of more than 30 case studies.

Both banks, along with other big institutions, said they were taking action to better understand the needs and internal governance of charity clients.

In the last two years, HSBC hired some 35 staff to work in a team dedicated to the charity sector, according to a source familiar with the hirings.

The specialists aim to ensure charities comply with global financial rules.

A problem that hit mainly smaller Muslim-related charities after Sept. 11, 2001 attacks in America accelerated in the last few years to involve thousands of charities.

“Delayed and declined payments have become a regular recurrence in the sector with charities experiencing disruption to their objectives on a daily or weekly basis,” a director at UK-based umbrella group Muslim Charities Forum, Monowara Gani, told Reuters.

Many British charities affected were reluctant to speak on the record about their experiences because they were worried that other banks might cut them off, or that donations could dry up if their banking problems were publicised. (NAN)