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Parliament Issues Gov’t Ultimatum Over Islamic Banking

The Islamic banking model is provided for under the Financial Institutions (Amendment) Act, 2016. The banking system is executed under the Sharia law which views as unethical practices like charging interest or speculation.
Speaker of Parliament Rebecca Kadaga chairing the afternoon plenary session.

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The Speaker of Parliament Rebecca Kadaga has directed the Minister of Finance Matia Kasaija to table before the House regulations to start the implementation of Islamic banking by 21st July.

Kadaga’s directive followed a matter of national importance raised by Kawempe North MP Latif Ssebagala who noted that although parliament has amended the Financial Institutions Act during the Ninth Parliament, no clear explanation has been given by parliament on the delayed implementation of Islamic banking.

Ssebagala said that Islamic banking would have come in handy for Ugandans whose businesses have been impacted by the Coronavirus (COVID-19) pandemic.

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In response, Speaker Kadaga tasked the Finance Minister to present the Islamic Banking regulations by 21st July 2020 to allow its immediate implementation.

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The Islamic banking model is provided for under the Financial Institutions (Amendment) Act, 2016. The banking system is executed under the Sharia law which views as unethical practices like charging interest or speculation.  

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 and awaiting 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 Shariah 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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