In a groundbreaking development for Uganda’s financial sector, Salaam Bank Limited has secured the esteemed distinction of being the inaugural financial institution in the nation to obtain a license to offer Islamic banking services.
This significant milestone was commemorated on Friday, as the Deputy Governor of the Bank of Uganda, Michael Atingi-Ego, ceremoniously presented the license to Salaam Bank officials, with the distinguished presence of the Permanent Secretary of the Ministry of Finance, Ramathan Ggoobi.
“The BoU is committed to providing oversight and support to Salaam Bank Limited as it embarks on this new journey. We believe that Islamic banking has the potential to make a significant contribution to the development of Uganda’s financial sector,” expressed Mr. Atingi-Ego at the momentous handover ceremony, held at the BOU headquarters in Kampala.
With palpable enthusiasm, Secretary to the Treasury Ramathan Ggoobi hailed this achievement as a monumental stride forward for the nation. “I am happy that everyone now will participate in the formal financial sector,” Ggoobi exclaimed.
This historic development follows closely on the heels of President Museveni’s assent to the Financial Institutions (Amendment) Act of 2023 last month, a legislative watershed that paved the way for the introduction of Islamic banking in Uganda.
Also referred to as Sharia-compliant or Islamic finance, Islamic banking adheres rigorously to the principles of Islamic law, or Sharia.
The introduction of Islamic banking marks a pivotal moment in Uganda’s financial landscape, heralding a new era of fresh funding avenues for businesses and individuals, ultimately fostering greater financial inclusion.
In addition, this innovation will empower Ugandans to avail interest-free loans, with the unique characteristic of both lender and borrower sharing profits or losses based on a pre-agreed ratio.
Salaam African Bank (SAB), headquartered in Djibouti, made its entry into the Ugandan market last year through the acquisition of Uganda’s Top Finance Bank Limited (TFB).
Established in 2008, Salaam African Bank has ascended to become the largest bank in Djibouti and has further expanded its footprint to Ethiopia, Kenya, and Malaysia, where it inaugurated Waafi Bank.
Under the terms of the newly acquired license from the Bank of Uganda, Salaam African Bank is poised to operate Islamic banking services for the ensuing year, heralding a new era of financial empowerment and accessibility for the Ugandan populace.
This historic development promises to usher in a new era of ethical banking, offering innovative financial solutions rooted in Islamic principles.
With a steadfast commitment to fostering inclusive economic growth, Salaam Bank is poised to redefine the financial sector, paving the way for a more diverse and sustainable banking experience in Uganda.
Do you have a story in your community or an opinion to share with us: Email us at editorial@watchdoguganda.com
