BoT finalizes rules for Islamic banking
The
Central Bank is finalizing legislation to regulate Islamic banks in
Tanzania aimed at making the bank to comply with international banking
principles.
The bank’s Deputy Governor Juma Reli stated on Wednesday that Islamic banks in the country were currently operating without such principles.
Reli who was speaking during Islamic Banking Seminar organized by the People’s Bank of Zanzibar (PBZ) in Dar es Salaam said the introduction of the service has assisted the country’s economy.
He said the service has been growing by more than 100 per cent year on year while continuing to perform well throughout financial ups and downs.
“Globally this market is worth approximately $6.7 trillion and provides access to 1.3 billion customers, growing at 15 to 20 per cent year by year,” he said.
PBZ introduced Islamic banking in 2011, being one of the first banks to provide the service in the country and since its introduction it has reduced by 70 per cent money supply that was circulating outside the banking system.
“As a leading bank in offering Sharia compliant products, I am informed PBZ has focused on development and growth of small businessmen, women and entrepreneurs investing in developing unique bouquet of products and services,” he said.
PBZ has the largest banking network in the Isles, with 12 branches across Zanzibar, and two in Dar es Salaam of which four exclusively offer Islamic banking services.
The year 2013 was the best for the bank, posting record audited profits of Sh4, 930.97 million compared to the 2012 audited profit of Sh1, 397.29 million.
PBZ’s Non Performing Loans (NPLs) were among the lowest in the sector, as of October 2014 NPLs was 2.42 per cent compared to industry average of 7.65 percent.
PBZ managing director Juma Mohamed said they have been able to launch services that are strictly Sharia compliant governed by ‘a robust set of guidelines.”
“There will be numerous opportunities in the short, medium and long terms…PBZ intends to introduce new products including Istisna, Salam and Murabaha working capital line of credit,” Juma said.
He said Murabaha line of credit is a revolving fund extended to a customer with agreed limit to be paid within an agreed period.
Under this arrangement a customer is allowed to finance a number of purchases during the facility period but should not exceed the agreed limit at any point of time.
The bank’s Deputy Governor Juma Reli stated on Wednesday that Islamic banks in the country were currently operating without such principles.
Reli who was speaking during Islamic Banking Seminar organized by the People’s Bank of Zanzibar (PBZ) in Dar es Salaam said the introduction of the service has assisted the country’s economy.
He said the service has been growing by more than 100 per cent year on year while continuing to perform well throughout financial ups and downs.
“Globally this market is worth approximately $6.7 trillion and provides access to 1.3 billion customers, growing at 15 to 20 per cent year by year,” he said.
PBZ introduced Islamic banking in 2011, being one of the first banks to provide the service in the country and since its introduction it has reduced by 70 per cent money supply that was circulating outside the banking system.
“As a leading bank in offering Sharia compliant products, I am informed PBZ has focused on development and growth of small businessmen, women and entrepreneurs investing in developing unique bouquet of products and services,” he said.
PBZ has the largest banking network in the Isles, with 12 branches across Zanzibar, and two in Dar es Salaam of which four exclusively offer Islamic banking services.
The year 2013 was the best for the bank, posting record audited profits of Sh4, 930.97 million compared to the 2012 audited profit of Sh1, 397.29 million.
PBZ’s Non Performing Loans (NPLs) were among the lowest in the sector, as of October 2014 NPLs was 2.42 per cent compared to industry average of 7.65 percent.
PBZ managing director Juma Mohamed said they have been able to launch services that are strictly Sharia compliant governed by ‘a robust set of guidelines.”
“There will be numerous opportunities in the short, medium and long terms…PBZ intends to introduce new products including Istisna, Salam and Murabaha working capital line of credit,” Juma said.
He said Murabaha line of credit is a revolving fund extended to a customer with agreed limit to be paid within an agreed period.
Under this arrangement a customer is allowed to finance a number of purchases during the facility period but should not exceed the agreed limit at any point of time.
SOURCE:
GUARDIAN ON SUNDAY
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