Kampala. Former Finance minister Syda Bumba has asked government to amend the Islamic Banking and Finance Regulations to realign them to the sector needs and new innovations.
Speaking at a Centenary Bank organised dinner for Muslims in Kampala, Ms Bumba said: “The recently gazetted regulations operationalising Islamic Banking have gaps and they need to be amended.”
For instance, she cited the failure of the current regulations to capture some components such as Islamic Insurance and how Muslims should participate in the activities of the stock exchange in regard to Islamic norms.
“Some of the things they are saying in the regulations cannot work under Islamic Banking for instance, the Central Bank, is the lender of the last resort, commercial banks under Islamic Banking cannot go to the Central Bank when it is charging interest,” she said.
Dr Tasha Ahmed Kasule, the Islamic Finance Consultants chief executive officer, said the challenge is not with the Central Bank being the lender of last resort, but the need for Bank of Uganda to define clearly, how they can capitalise the banks while following the Sharia compliant terms.
He also disagreed with Ms Bumba on the argument that Islamic Banking should have its own regulator.
Mr Fabian Kasi, the Centenary Bank managing director, expressed interest in Islamic Banking, saying the bank is innovative and will incorporate the new form of operation, once the regulations are fully operational and at the request of its customers.
Bank of Uganda issued regulations on Islamic Banking in February.