Uganda /The central bank has started making rules to accept Islamic banks

Uganda /The central bank has started making rules to accept Islamic banks

 
 

Islamic finance seems to be expanding in the future as a background of worldwide money surplus.
Even in Uganda, that wave is steadily coming, Africa News reports.

 

In December 2017, the Central Bank of Uganda became an associate member of the Islamic Financial Services Board (IFSB), one of the industry’s main standard-setting members, and are accelerating the development of financial services based on the Islamic law (Sharia) (same as Nigeria, Morocco, Senegal).

 

The Ugandan government is currently proceeding with the development of domestic law towards the entry of Islamic banks for the purpose of inclusion and financial access support.

 
 

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Islamic banks may have an image of “banks used by Muslims”, but that is a total misunderstanding.
Islamic banks mean banks dealing with financial services stipulated by the Islamic law.

 

Unlike ordinary banks, Islamic banks operate according to their own Islamic religious rules (commonly to be said “Sharia”).
There are unique rules such as banning interest and prohibiting monetary speculation.

 

It is, of course, prohibited to invest in businesses involving pork, alcohol, gambling, etc., which Muslims are prohibited by Sharia.

 

Then, how does Islamic bank secure their profits?

 

For example, a partnership contract with an entrepreneur.
This is based on the money funded by the Islamic banks for the investors, the entrepreneur makes investment and operation, profit is raised, the bank receives the “dividend” as return.
This is called “Mudaraba” in Islamic law.
It is a basic form of contract in Islamic finance.

 
 
 

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The point of this article is that Islamic banks are advancing to non-Muslim countries too.
Regardless of the number of Muslims, it appears that “Islamic finance” as a service is easy to accept in African countries as well.

 

The development of Islamic banks which prohibit the sale of speculative financial products can be said to be a very user-friendly system for those who seek solid financial support in rural areas.

 

Although there are obviously the necessity of legal maintenance procedures, the expansion of Islamic finance will continue to continue in African countries.

 
 
※Refered:Africa News

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