Museveni to launch Islamic banking today

President Museveni is expected to officially launch the Islamic (Sharia) banking which was operationalised in the country in September last year.

The launch, which is due to take place at Kololo ceremonial grounds has been organised by the bank in partnership with the Office of the National Chairman led by Hadijah Namyalo.

Islamic banking which is run in line with the Shariah Islamic principals is being offered by Salaam Bank Ltd, a subsidiary of Djibouti based Salaam Group which received an Islamic banking licence from Banking of Uganda (BOU) last year.

Speaking to this publication on Tuesday, Salaam Bank Ltd chief executive officer Michael Mande said that the population, including non-Muslims have embraced this banking system.

“For Muslims, the uptake has been good because they had never gotten this experience which is exactly in line with the Islamic principles, and the non-Muslims have understood the values of this banking,” he observed.

The bank is currently offering one of the products known as debt-like financing structures; where it buys an asset on behalf of the customer and sells it to the customer at a markup.

This category is also known as Murabahah, where the bank and the customer enter a sales contract at a Profit Mark-up, and here the customer (borrower) applies for financing to purchase an asset like land, car but the bank purchases that property first before reselling it to the customer at a price higher than the cost price but on a deferred payment schedule- resulting in a profit.

Another active category which is yet to be offered at Salaam Bank is the Mudarabah (silent and active partner), where the bank which in this case is the silent partner, enters a partnership arrangement in which the bank it provides funds to a customer/borrower for investment in a business venture and they both later share the profits as agreed in the agreement.

Mande told Monitor that the launch and Museveni’s endorsement will breathe more life to Sharia banking and attract more customers.

Meanwhile, ONC has also organised special Dua prayers that will run back-to-back with the Islamic banking launch.

Namyalo now wants the Muslim Community to flock Kololo and interact with the the Ugandan leader in the holy month of Ramadhan.

“The Dua prayers today, will give us the opportunity to show gratitude to Museveni for his efforts in helping the Muslim community recover lost property and his signing of the law on Islamic banking. Let's show up,” she said.

ONC will also give different foods to Muslims, to help them in breaking their fasts as well as enjoy Eid celebrations which are weeks away.