Kampala. Parliament has tasked Finance Minister, Matia Kasaija to explain the delayed implementation of Islamic banking, which is provided for in the Financial Institutions (Amendment) Act, 2016. Islamic banking operates in line with Sharia law that prohibits the charging of interest and speculation.
During plenary, the Kawempe North MP, Latif Ssebaggala raised the delayed operationalization of Islamic Banking as a matter of National Importance. He tasked the Finance Minister to explain the delay despite the amendment of the Financial Institutions Act in the 9th Parliament that paved way for the implementation of Islamic banking.
The Speaker of Parliament Rebecca Kadaga also raised similar queries about the delayed implementation of Islamic banking.
Minister Kasaija said that they were also concerned but the law requires that there must be a Council that will govern Islamic banking. He said that they have been trying to look for qualified people to sit on the Council but Uganda doesn’t have that kind of personnel.
“We thought about recruiting from abroad. But I think now, we are going to amend the law so that we remove that provision because it will not make much difference. I will be coming to parliament any moment to amend the law so that we remove that provision then we move ahead with Islamic banking,” said Kasaija.
However, Ssebaggala couldn’t have any of this, saying there are more than 8 Ugandans with the required qualifications to sit on the Sharia Board.
“If you are asking for people qualified in that field, they are there and I can present them anytime. People have have studied Islamic banking and are waiting for the government to kick-start the program. I don’t agree with the Minister that we don’t have qualified people,” said Ssebaggala questioning Minister had not advertised so that qualified people can apply.
Bugiri Municipality MP, Asuman Basalirwa advised that the Minister to consult Muslim leaders on the personnel.
In response, Kasaija said that he would work with Bank of Uganda –BoU to ensure that qualified people are sought out.
This is not the first time parliament is questioning delays in the implementation of Islamic banking. Last year, Kadaga directed Kasaija to regulations to start the implementation of Islamic banking by 21st July 2020.
In 2017, the Bank of Uganda Governor, Emmanuel Tumusiime Mutebile said that the regulations that will govern Islamic banking in the country had been submitted to the Ministry of Finance pending clearance. The regulations followed an assent by President Yoweri Kaguta Museveni to the Financial Institutions (Amendment) Act, 2016 that brought into force Islamic Finance subject to the establishment of the Central Sharia Advisory Board in the Central Bank.
Other African countries that have adopted Islamic banking but are non-Islamic states include South Africa, Senegal, Botswana, Zambia, Eritrea, Mozambique, Kenya, Tanzania and Rwanda.
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