BANK OF UGANDA
THE WORKSHOP ON THE FUNDAMENTALS OF
ISLAMIC BANKING OPERATIONS
ORGANIZED BY TROPICAL BANK LIMITED
Speech
By
PROF. EMMANUEL TUMUSIIME-MUTEBILE
GOVERNOR, BANK OF UGANDA
SPEECH BY THE GOVERNOR AT THE WORKSHOP ON THE
FUNDAMNETALS OF ISLAMIC BANKING OPERATIONS
AT HOTEL AFRICANA KAMPALA - NOVEMBER 28, 2016
The Chairman Board of Directors, Tropical Bank Limited, Honourable
Gerald M. Ssendaula,
Senior Management of Tropical Bank Limited,
Resource Persons from Malaysia,
Representatives from the Banking Sector and the Business Community,
Participants,
Ladies and Gentlemen.
On behalf of the Bank of Uganda and on my own behalf, I wish to
welcome you all to this very important workshop on Islamic Banking. I
further wish to extend a very special welcome to the delegates from
Malaysia. Please get some time off to enjoy the beautiful sites and
sounds of Uganda, the Pearl of Africa and Gifted by nature.
Let me congratulate Tropical Bank Limited upon organ1z1ng this
workshop, which is aimed at sensitizing the public on Islamic Banking.
The Bank of Uganda believes that creating public awareness on Islrunic
Banking is one of the key ingredients for achieving a smooth rollout of
Islamic Banking. It is for this reason that the Bank of Uganda continues
to participate in sensitization programmes like these whenever called
upon. As you may recall, in May this year, Bank of Uganda participated
in a similar conference, organized by the Islamic University in Uganda at
this very hotel. I must add that such initiatives augment Bank of
Uganda's Islamic Banking sensitization programmes and are very
Furthermore as part of the Financial Literacy strategy, Bank of Uganda
has in the past undertaken multimedia sensitization campaigns on
Islamic Banking entailing Radio Talk Shows, Newspaper Inserts,
Workshops and Journals, among others. I wish to pledge Bank of
Uganda's commitment to continuing with the above-mentioned
sensitization campaigns.
The topic of this workshop is "The Fundamentals of Islamic Banking
Operations" and I note that the resource persons include delegates from
Malaysia, a country that possesses enormou s experience in the Islamic
Banking field. I therefore call upon the participants here today to take
full advantage of the opportunity presented to you in this workshop. I
urge you all to seek as much information as possible from the Islamic
Banking experts in order to enhance your understanding of Islamic
Banking.
Ladies and Gentlemen, this workshop could not have come at a more
opportune time than now, when the Bank of Uganda is in advanced
stages of putting in place a Supervisory and Regulatory Framework for
Islamic Banking. Since January 2016 when H.E the President of the
Republic of Uganda assented to Financial Institutions (Amendment) Act,
2016, which embraced Islamic Banking, there has been tremendous work
going on internally in the Bank of Uganda, which is mainly aimed at fast
tracking the development of an enabling Supervisory and Regulatory
Framework for Islamic Banking. The consultant engaged by the Bank of
Uganda prepared a draft Islamic Banking Legislation, which is currently
under review by the various stakeholders, whose feedback, shall be
Bank of Uganda is aware that the Banking sector and the general public
are eagerly waiting for the rollout of Islamic Banking in Uganda. I wish to
assure you all that the Bank of Uganda is fast tracking the establishment
of a Supervisory and Regulatory framework for Islamic Banking. All
stakeholders shall be informed as soon as the requisite processes have
been completed. I wish to reiterate that an effective Supervisory and
Regulation framework is key to ensuring the success of Islamic Banking
and Bank of Uganda is keen to achieving this objective.
Islamic Banking has gained prominence internationally due to its
exponential growth and resilience to financial crises as well as the nature
of Shari'ah-Compliant finance models that focus on the principles of
investment in real assets and risk-sharing. In the Islamic Banking
model, each contract is backed by an underlying asset or investment
activity which creates a direct link between financial markets and
economic activity. The Islamic finance model has thus contributed to the
spread of real-asset-based finance principles in many jurisdictions and is
regarded as an ideal option for the financing of infrastructure projects.
This provides a condu cive environment for achieving a more integrated
approach to economic growth. The success stories of Islamic Banking
experienced in other jurisdictions would, without a doubt, be replicated
in emerging markets like Uganda once Islamic Banking is rolled out. I
am happy to note that the agenda for this workshop covers the envisaged
benefits of Islamic Banking, among other topics.
and Development, it remains an emerging field in the Financial System
worldwide. I, therefore, urge all stakeholders to clearly understand
Islamic Banking and Finance model; appreciate its unique tenets that
distinguish it from Conventional Banking and at the same time
acknowledge the similarities between the two (2) models. This will
significantly contribute to the effective rollout and growth of the Islamic
Banking sector in Uganda.
On its part, Bank of Uganda will continue to collaborate with all
stakeholders and ensure that the requisite Regulatory and Supervisory
Structures for supporting the growth of Islamic Banking and Finance in
this country are robust and conducive for all investors.
With those remarks, it is now my honour to declare the workshop on The
Fundamentals of Islamic Banking Operations officially open.
I wish you fruitful deliberations.
I thank you.
E. Tumusiime-Mutebile
GOVERNOR
BANK OF UGANDA
KAMPALA
Mission: To f oster price stability and a sound financial system Vision: To be a centre of excellence in upholding
Macroeconomic stability
Page 5