|code: 237454||Date: 2011/04/19||source: Islam Today|
Malawi's Reserve Bank Rejects the Possibility of an Islamic Bank in the Country
Islamic finance caters for customers who want to avoid earning interest, which is viewed as usury under Islamic Law. Islam also prohibits speculation and investment in non sharia-compliant industries.
RBM Director of Banking Supervision Noel Mkulichi said the central bank will not allow Islamic banking "because of Sharia law elements".
Mkulichi says the country's banking act and the constitution does not allow Sharia law.
Malawi has some two million Muslims from a population of 12 million.
Shariah Investments Limited (SIL) Group Advisor Ziyaad Mahomed briefed banking captains during a day-long Islamic economics and finance seminar in Blantyre recently that says the absence of an Islamic banking window in the country’s banking system is making Malawi lose out on potential Foreign Direct Investment (FDI) from the Islamic world.
"Islamic banking can also encourage the current Muslim businessmen to be involved in Islamic finance thereby industrialising at a much faster rate and that the growth of business will be at a much rapid rate," Mahommed, the South African-based Islamic banking expert said.
Ecobank Managing Director Femi Salu welcomed the idea of having an Islamic bank.
However, government sources rejected the idea, saing they feared the Islamic banking could be exploited for illicit purposes, such as structuring accounts to mask illicit activity or money laundering.
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