State urged on regulatory framework for Islamic banking

Speaking in Dar es Salaam after hosting an iftar banquette dinner for the bank’s clients, acting Chief Executing Officer, Gift Shoko said there are many Tanzanians who need Islamic banking services hence the urgent need to have a regulatory framework in place.

"CBA urges the government to speed up implementation of the Islamic banking framework, to regulate and control the industry in the country,” Shoko said.

He pointed out that many Tanzanians are eager to get Islamic banking services in an organized manner backed by legislation.
“We call upon the government to help this group of Tanzanians by ensuring that there is a legal framework to guide its services,” Shoko stressed.

Speaking at the same function to break the fast, Imam of Masjid Maamur, Sheikh Issa Othman urged Muslims to understand the holy month of Ramadan by assisting others who are vulnerable in the community.

“In this holy month of Ramadan, we are calling on all people in the country to live together in peace and harmony,” he said.
Sheikh Othman also strongly backed Shoko’s calls for government to speed up putting in place Islamic banking regulatory framework to guide banks on how to serve the public using Sharia laws.

Islamic banking is consistent with the principles of Sharia (Islamic law) and its main characteristics includes zero interest rates on loans and if invested in a business then it should not involve alcohol or pigs.

Although these prohibitions have been applied historically in varying degrees in Muslim communities to prevent un-Islamic practices, only in the late 20th century were Islamic banks formed to apply such principles.

By 2009, there were over 300 banks and 250 mutual funds around the world complying with Islamic principles and as of 2014 total assets of around $2 trillion were sharia-compliant.

According to Ernst & Young, although Islamic Banking still makes up only a fraction of the banking assets of Muslims, it has been growing faster than banking assets as a whole, growing at an annual rate of 17.6 percent between 2009 and 2013, and is projected to grow by an average of 19.7 percent a year to 2018.