One of UK’s biggest banks, Barclays, late on Tuesday said it had ended banking activities with Dahabshiil, an authorised Somali payment institution and other money service businesses.

But Dahabshiil warned on Wednesday that millions of Somalis at risk of forfeiting close on$500 million in remittances because of this move.

It confirmed that Barclays will withdraw banking services from up to 250 Money Service Businesses (MSBs) in the UK, including Africa’s largest, Dahabshiil, along with a number of other Somali MSBs.

Dahabshiil said bank’s decision came after an “industry-wide cull” which has seen lenders like Barclays, HSBC and the Royal Bank of Scotland (RBS) review the money-service sector more closely and alter their suitability criteria for MSBs.

“Barclays recently informed three-quarters of the money-service companies that use its accounts that it no longer wanted their custom – and gave until mid-July find alternative banking facilities,” Dahabshiil said in a statement.

“Barclays’ decision is understood to be part of a strategy to exit the money transfer sector as a whole in a bid to reduce the risk of further money laundering accusations and negative media headlines.”

Fox Business news attributed Barclays move to the fact that the lender wanted to limit hazards related to stringent “financial crime regulations.”

Barclays has evaluated its clients and severed links with many firms in the

region whose financial offense rules failed to meet specific ideals, US news giant claimed.

“It is recognized that some money service businesses don’t have the proper checks in place to spot criminal activity and could therefore unwittingly be facilitating money laundering and terrorist financing,” Fox Business quoted a Barclays spokesperson as saying.

Barclays reportedly said it is content to provide professional service to other companies that have strong principles against financial corruption.

These include companies that continue to work with Somalia such as the US-based Western Union (WU).

But the pull-out has left many Somalis livid, complaining Barclays move left many blameless Somalis with little or no access to funds desperately needed to survive.

Dahabshiil confirmed an outcry in the sector has been triggered. It said industry bodies, such as the UK Money Transmitters Association (UKMTA), a trade body for Britain’s payments sector, embarking on an industry campaign to highlight the damaging impact of Barclays’move.

“Evidence gathered by UKMTA suggests that as many as 75 per cent of UK money transmitters have experienced problems obtaining or retaining a bank account,” Dahabshiilsaid.

“UKMTA further believes that as many as 25 per cent of MSBs that have registered with HMRC have not been able to trade because of problems in obtaining banking facilities.”