Middle East Banks apply to offer Islamic Finance in Uganda

  • Share via facebook
  • Tweet this
  • Bookmark and Share
ISLAMIC BANKS: Middle East investors can start operations either by acquiring a local bank or setting up a new Islamic bank in the country

ISLAMIC BANKS: Middle East investors can start operations either by acquiring a local bank or setting up a new Islamic bank in the country

Uganda has received applications from three Islamic banks in the Middle East to offer Shariah-compliant financial services in the country.

“The Middle East investors can start operations either by acquiring a local bank or setting up a new Islamic bank in the country,” Grace Stuart Ndyareeba, deputy director of commercial banking at Bank of Uganda, said in an interview in Jakarta on Friday, declining to name the banks.

The African nation is changing its banking rules to allow lenders to operate under Islamic law and representatives from central bank are in Jakarta to learn from Indonesia’s experience. Southeast Asia’s largest economy, home to the world’s largest Muslim population, passed a law in 2008 to allow banks to offer services that comply with Islam’s ban on interest.

Uganda hopes to pass amendments enabling Islamic finance by early 2012, Titus Mulindwa, deputy legal counsel at Bank of Uganda told reporters in Jakarta on Friday.

Mulindwa said: “We’ve been studying amendments to the current banking rules to allow Islamic banks to own assets and are looking at refining tax laws for Islamic banks to operate.”

Around 12 percent of Uganda’s 33 million people are Muslims, according to the Central Intelligence Agency World Factbook.

“The interest in Islamic financial services is driven by the people,” Ndyareeba said. “As the central bank, we’re facilitating their needs.”

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Sam

Will these Banks serve only the Muslims or as well as the rest of the communities?
What are the long term effects and impact on our country for which such banks vie for service? At zero interest rates, how do such banks normally compete with others unless their benefits are elsewhere?
Someone educate me

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Q&A with Noor Bank

Q&A with Noor Bank

Kazim Ali, head of corporate banking at Noor Bank, discusses...

Saudi bank's $6bn IPO ignites religious controversy

Saudi bank's $6bn IPO ignites religious controversy

Plans by National Commercial Bank have prompted some clerics...

Dubai flexes legal muscles as financial court system grows

Dubai flexes legal muscles as financial court system grows

Landmark ruling by the court system in Dubai's financial free...

Most Discussed