Embrace Islamic Banking for Inclusive Growth- BoU Deputy Governor

Bank of Uganda has issued the first Islamic banking licence to Salaam Bank Limited.

Deputy Governor, Bank of Uganda, Mr. Michael Atingi-Ego on Friday, issued the first Islamic Banking licence to Mr. Michael Sande of Salaam Bank Limited in the presence of Mr. Ramathan Ggoobi, the PSST, who is also BoU board member.

In his remarks, Atingi-Ego thanked the Government and all stakeholders for working tirelessly to put in place the enabling Islamic banking legal framework.

“This is a significant milestone for Uganda, and it is a testament to the commitment of all involved to promoting financial inclusion and economic development,” he said. Recently, Parliament passed all bills that operationalise Islamic banking.

He also congratulated the Board of Directors, management, and staff of Salaam Bank Limited on their efforts to pioneer the Islamic banking model in Uganda.

“This is a bold and innovative move, and I expect it will succeed,” deputy governor said.

Islamic banking is based on the principles of Shariah, which prohibits the charging of interest, products with uncertainty (speculation), gambling, and activities that society deems detrimental.

He urged all Ugandans to embrace Islamic banking, saying it is not limited to Muslims.

“This financial offering can benefit everyone, regardless of their religious beliefs. Of course, there are risks associated with any new venture. However, I am confident that Salaam Bank Limited has the expertise and resources to manage these risks,” he said.

According to BoU, Islamic banking has the potential to make a significant contribution to the development of Uganda's financial sector in several ways, such as; financial inclusion, product diversity, profit-sharing and real-world investment.