In a significant milestone for Uganda’s financial sector, Salaam Bank, formerly known as Top Finance Bank, has been granted a license by the Bank of Uganda to provide Islamic Banking services. The issuance of this license follows the enactment of the Financial Institutions (Amendment) Act 2023, which opened the door for investors to establish fully fledged Islamic Financial Institutions and for existing Financial Institutions to offer Islamic Banking services alongside conventional banking.
Islamic Banking adheres to the principles of Shari’ah, emphasizing fairness, transparency, and real economic activities. It prohibits elements like interest, uncertainty, and gambling while encouraging risk-sharing and profit-sharing in economic transactions.
While receiving the operating license from Deputy Governor Dr. Michael Atingi-Ego, Salaam Bank’s representative, Mr. Michael Mande, expressed gratitude to the government, Bank of Uganda, and all stakeholders who contributed to the creation of a legal framework for Islamic Banking in Uganda.
Dr. Atingi-Ego emphasized the importance of adapting to global trends and fostering an enabling economic environment to attract both local and foreign investments. Islamic Banking, he noted, would broaden access to financial services and provide an alternative to interest-based banking, aligning with Uganda’s development goals.
Mr. Mande affirmed Salaam Bank’s commitment to swiftly establish branch networks and service channels, making Islamic Banking accessible to a wide range of customers. He also highlighted that the bank, now owned by Djibouti-based Salaam Africa Bank, was fully operational on Islamic Banking principles and open to all customers.
The enactment of the Financial Institutions (Amendment) Act, 2023, marked a crucial step towards introducing Islamic Banking in Uganda, guided by Shariáh principles, while regulatory oversight will remain under the purview of the Bank of Uganda and the Ministry of Finance, Planning, and Economic Development.
The introduction of Islamic Banking is expected to enhance financial sector access, deepen product offerings, and foster economic development in Uganda, aligning with global trends and local demands.