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Islamic Banking Enters Tanzania
Tanzanian’s will from this week experience new waves in the banking sector as they start to enjoy the benefits of Islamic Bank- ing, which forbids earning of interests in the banking transactions.
NBC Bank announced over the weekend the introduction of Islamic Banking window, which is consistent with Shariah law, just a day after another bank, Stanbic, introduced the same.
According to the NBC Bank Managing Direc- tor, Mr Christo De Vries, funds deposited in the accounts would be invested in business- es approved under Shariah Law. He said NBC’s Islamic Banking, would start with two products, Cheque Account and Savings Ac- count. The Savings Account will have an em- bedded funeral cover (Takaful death benefit) included in monthly maintenance fees.
“The products are built around the Shariah Laws which govern the way in which Mus- lims live their lives and conduct their daily business including financial affairs,” the MD said in Dar es Salaam.
The service, according to the bank, starts to- day and will be available in all their branch- es across the country and will be free for all people regardless of their religious affilia- tions.
“Muslims and non-Muslims globally are choosing to make use of Islamic Banking because it is a service that gives them the assurance investment of their money. All in- vestments made under Islamic Banking are never associated with the traditional ‘sin’ in- dustries such as alcohol, tobacco, gambling or pornography,” said NBC Islamic Banking Board Chairman, Dr Mussa Assad.
In terms of account opening, Islamic Bank- ing will be conducted in exactly the same manner as opening a conventional account. However, the product features will differ, based on Shariah principles, said NBC’s Marketing Manager, William Kallage.
Tanzania is estimated to have over 40 per cent Muslim community. Mufti Shaaban Bin Simba, who witnessed the introduction of
the service, said it was a relief for the Mus- lim community as they have for long suffered from high interest rates.
“The Almighty God forbids charging of in- terests. He destroys any economy that de- pends on interests and blesses offerings,” the Mufti said.
He noted that interest rates were the reason for the collapse of world markets and subse- quently followed by world economic crisis.
The Mufti said, as a leader of the Muslim Council of Tanzania (Bakwata), he would launch a special facility within the NBC Is- lamic Banking machinery that would enable Muslims to put their savings to accumulate money for the annual Holy pilgrimage of Hajj.
Islamic Finance Main Challenges in the Spotlight
Challenges facing the Islamic finance in- dustry will be discussed at a key summit which opens this week in Bahrain.
The two-day 7th International Financial Serv- ices Board (IFSB) annual summit themed Global Financial Architecture: Challenges for Islamic Finance, which has attracted more than 250 delegates from 20 countries, will be held at the Ritz-Carlton Bahrain Hotel and Spa and is hosted by the Central Bank of Bahrain.
Luxembourg, the first regulatory authority of a European Union country to join the IFSB, yesterday held a Luxembourg Country Show- case which highlighted Luxembourg as a Eu- ropean hub for Islamic finance, focusing on the registration and listing of Islamic funds and sukuk.
The Luxembourg event was complemented by a Malaysia Showcase dinner organised by the Malaysia International Islamic Financial Centre .
The dinner was addressed by former Malay- sian prime minister Mahathir Mohamed. The IFSB Country Showcases have acquired a prestige in their own right and are an ef- fective platform for selected countries to portray their Islamic finance initiatives and
experiences in adopting and promoting the growth of a sound and stable Islamic finan- cial services industry, and presented to a high-profile, focused group of potential in- vestors and stakeholders.
The growing interest in Islamic finance from new markets and the industry’s ability in general to relatively absorb the shocks of the financial crisis has attracted the atten- tion of several countries and analysts. This interest is further manifested by the growth of the IFSB’s own membership.
In its last meeting held on April 6 in Khar- toum, Sudan, the council of the IFSB admit- ted four new members that included the Na- tional Bank of Tajikistan.
The recently admitted four organisations bring the total membership of the IFSB to 191 members.
They comprise 50 regulatory and supervi- sory authorities, six international inter-gov- ernmental organisations and 135 market players, professional firms and industry as- sociations operating in 40 jurisdictions.
CBB Governor Rasheed Al Maraj will deliver the opening address at the event. A number of regulators have confirmed their participation including EU regulators Banque Centrale du Luxem bourg governor Yves Mersch and Central Bank of Sweden governor Stefan Ingves,.
This is in addition to nine other governors and deputies of central banks and senior representatives of several international or- ganisations, including Bank for International Settlements, International Organisation of Securities Commissions and the World Bank, as well as market players from vari- ous industries.
Malaysian Islamic Bank Targets 26 Branches by Year’s End
Bank Simpanan Nasional (BSN) is target- ing to have 26 full-fledged Islamic banking branches nationwide by year-end as part of its effort to widen its footprint in the Is- lamic banking arena.
General manager and chief executive Datuk
2010 June GlobalIslamic Finance 7
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