Major hurdles around the introduction of Islamic Banking in the country has so far been jumped.
The cabinet approved it. Parliament Passed it. And now the ball is in the court of Bank of Uganda, the industry regulator, who are supposed to sanction its roll-out.
Daily Monitor understands that the central bank is committed to sanctioning the roll-out of the Islamic Banking as soon as possible.
So far several commercial banks have expressed willingness to operate an Islamic Banking.
Currently, more than half of the 24 licensed conventional and Commercial banks in Uganda have expressed interest in providing Islamic banking products to their customers.
The latest to show interest is EXIM Bank.
Speaking after the Iftar (the evening meal with which Muslims end their daily Ramadhan fast at sunset) which the bank hosted last week, Mr Raj Banerjee, the deputy chief executive of EXIM bank, said they cannot wait to offer this service—Islamic banking, to their wide range of customers.
At the moment they are going about installing the software and assembling a team that will be directly involved offering the Islamic Banking.
“….this will be good for everybody. This is why we are getting prepared to launch the Sharia compliant banking once our proposals are approved by the Bank of Uganda,” Mr Banerjee told Daily Monitor in an interview last week.
As opposed to conventional banking system, Islamic banking whose mode of operation is derived from the Sharia (law) prohibits interests on among other things deposits. Instead it promotes sharing of profit and losses instead of imposing interests on loans and other deposits of money.