The UK's first not-for-profit bank, which will use savers' money to offer affordable loans to charities, is set to be launched later this year.

The Charity Bank - the brain-child of the Charities Aid Foundation - will open for business in September 2002.

The new bank is both a registered charity and will also be regulated as a bank by the Financial Services Authority (FSA), the UK's financial regulator.

Its launch has coincided with an announcement by the Co-operative Bank on its ethical policy.

Wednesday marks the tenth anniversary of the launch of the bank's ethical policy, and it is using the occasion to announce changes to the scheme.

The bank has now said it has ruled out doing business with biotechnology companies involved in the uncontrolled release of genetically modified organisms or with biotech companies involved in cloning.

The Co-operative Bank updated its policy following consultation with 100,000 of its customers.