BoU Has Tactfully Failed Islamic Banking In Uganda-Muslims

BoU Has Tactfully Failed Islamic Banking In Uganda-Muslims an accessible web community

By Spy Uganda

Kampala:  The Muslim Community has blamed some officials at Bank of Uganda for allegedly systematically failing Islamic Banking in Uganda.

The Parliament of Uganda in 2016 passed the Financial Institutions amendment Bill, the law that introduced Islamic banking, which  is consistent with Islamic Shar­i’ah (law).

The parliamentary clearance was, however, subject to the establishments of a Cen­tral Shar­i’ah Ad­vi­sory Board in the Central Bank to regulate banks providing Islamic banking products.

However ever since Islamic Banking was introduced, Islamic leadership across the divide, blame BoU for failure to establish the Central Shari’a Advisory Council, saying this is a deliberate move to frustrate the final lap of establishing Islamic Banking.

In a statement seen by TheSpy Uganda, Islamic leaders dismissed suggestions by BoU officials that there is an insufficient pool of experts to form the Central Shari’a, Advisory Council.

“We wish to expose (sic) our prolonged suffering caused by the delay by Bank of Uganda to establish this council [Central Shari’a, Advisory Council]. This has taken almost five years since the law was passed. Bank of Uganda should not have any excuse in finding the two Shari’a scholars as specified by the law,” the statement reads in part, highlighting at least 10 technically suitable local Shari’a scholars, where it [Central Bank] can choose from.

Islamic leaders went a head and exposed BoU’s evil acts towards developing the banking sector Uganda by listing a couple of scholars that fully fit in the Central Shari’a Advisory Council including, Dr Sulaiman Lujja, the Tropical Bank head of Islamic Banking, Dr Abdul Hafiz Walusimbi, the IUIU head of Shari’a, Dr. Anas Abdunoor Kaliisa, the director, Salaam Charity, Sheikh Muhammad Ali Waiswa, second deputy mufti, Uganda Muslim Supreme Council and Dr Sowed Juma Mayanja, a lecturer at Makerere University.

Others are Dr. Kisuule Muhammad, director House of Zakat, Dr Rashid Semuddu, consultant, Dr Ediriisa Kasozi, deputy dean and head of department Islamic Law, Faculty of Law, Yahya Kasujja, Senior associate account, Islamic Development Bank and Sheikh Ismail Njuki, director, Madina International Development Agency.

The statement, headlined: ‘How the delay in establishing the Central Shari’a Advisory Council at Bank of Uganda has Frustrated Islamic Banking’, also noted that it was unfortunate that all the “amendments that were passed in the law in 2016 (such as agent banking and bancassurance, have been established except Islamic Banking.

In July last year, while addressing a stakeholders’ meeting in Masaka, former BoU deputy governor Louis Kasekende, said the Cenral Bank had been vetting three financial institutions, including two foreign banks and one local bank, that had applied to offer Islamic banking in Uganda.

Sources familiar with the matter had then revealed that the applicants included Tropical Bank and MiSK Bank, which operates an Islamic Banking model in the Middle East.

Dr Kasekende also indicated that BoU was finalizing consultations with various stakeholders to establish the Shariáh Advisory Council before they Central Bank could issue licences to financial institutions.

While passing the Financial Institutions amendment Bill, Parliamentarians members noted that the Financial institutions Act was enacted to address the crisis in the banking sector that resulted into the closure of several commercial banks,Crane Bank Limited’ Inclusive.

Nevertheless, many stakeholders were excited about the possibility of Islamic banking and its im­pli­ca­tions,  its advantages of assisting in financial inclusion, reducing the impact of harmful products and practices, promoting the principles of financial justice, encouraging stability in investments among others. an accessible web community

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