- Salaam Bank to start operating in the country.
- The Bank received operational license.
The central has granted Salaam Bank to start offering Islamic banking products in the country.
The bank has become the first financial institution in Uganda to be licenced to offer Islamic banking services in the country.
On Friday 8th September, Bank of Uganda deputy governor, Michael Atingi-Ego handed over the licence to the bank officials in the presence of the Ministry of Finance Permanent Secretary, Ramathan Ggoobi.
According to him, the the operational certificate allows the Administrator of Salaam Bank to effectively starting the Islamic banking in the country.
He noted that he is optimistic that the legal reforms that have been put in place to support the operations of Islamic banking will fully make the bank successful.
Within the next 12 Months the central bank is expecting the bank to start delivering the services to the community.
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,” said Mr Atingi-Ego, at the handover ceremony held at the BOU head office in Kampala.
Meanwhile, the Secretary to the Treasury, Ramathan Ggoobi described the move as a big milestone to the country's economy.
“I am happy that everyone now will participate in the formal financial sector,” He said.
The issuance of the first Islamic banking licence follows President Museveni’s signing of the Financial Institutions (Amendment) Act 2023 last month, that paved way for the introduction of Islamic banking in Uganda.
Also known as Sharia-compliant or Islamic finance, Islamic banking is a financial system that operates under the principles of Islamic law, known as Sharia.
The introduction of Islamic banking marks a pivotal moment in Uganda’s financial landscape, unlocking fresh funding avenues for businesses and individuals, thereby fostering financial inclusion.
Islamic banking will also open doors for Ugandans to take interest free loans but also the lender and borrower share profits or losses on a pre-agreed ratio.
Salaam African Bank (SAB), with headquarters in Djibouti entered the Ugandan market last year when it acquired Uganda’s Top Finance Bank Limited.
The Bank was officially opened in 2008 and since then, has risen to become the largest in Djubouti.
It has expanded to Ethiopia, Kenya and Malaysia and now in Uganda.