Ghana positive on starting Islamic banking

The central bank of Ghana says it will consider giing a license for the regime of Islamic banking in the country if a formal request is made.

According to the governor of the Bank of Ghana (BoG), Mr Kwesi Amissah-Arthur, the Bank will consider such a regime if a “formal request is made”.

“For now there has been no request for us to consider Islamic banking from any group,” Amissah-Arthur told journalists in Accra December 21, 2011.

“I think when a request is made – we should be able to consider it,” he adds.

Mr Amissah-Arthur noted that his fellow governor in Nigeria, Lamido Sanusi, is trying to get him to attend one of the country’s Islamic Banking association conferences.

But governor Amissah–Arthur said he doesn’t know that as a fact  but some of the wealthiest persons in Northern Nigeria are objecting to the system.

Islamic banking (or participant banking) is banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics, according to Wikipedia.

Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees (known as Riba or usury) for loans of money. Investing in businesses that provide goods or services considered contrary to Islamic principles is also Haraam (forbidden). While these principles may have been applied to historical Islamic economies, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community, added the user-generated content site.

In neighbouring Nigeria with a population of over a 150 million the central bank had granted approval in principle to Jaiz Bank International Plc to operate as the country’s first Islamic bank, news publication ThisDay reports June 21, 2011 citing Elombah News.

It is expected that the regime will bring about 70 million muslims to particpate in the banking industry in Nigeria.

In line with its plans to entrench Islamic Banking culture in the country, the apex bank had early this year rolled out its guidelines on Sharia governance for Islamic Banking, according to ThisDay.

Sanusi Lamido Sanusi – Nigeria Central Bank governor

But the introduction of Islamic banking in Nigeria is bringing some divide within the country’s religious (both Christians and Muslims) leaders.

A Voice of America (VOA) report July 15, 2011 indicates some sects, especially Christians are saying the move violates the country’s secular constitution.

The Christian Association of Nigeria says the move violates the country’s secular constitution and comes at a dangerous time when security forces are battling Islamic fundamentalists who are fighting for an independent nation ruled by Islamic law, reports the VOA.

A Catholic priest named Father Paul Anyansi of the the St. Peter Claver Catholic church told the VOA that he recognizes the potential economic benefits of Islamic banking but believes its dangers are far greater.

The Standard Chartered Bank has also hinted of starting Islamic banking services in Oman and Nigeria with talks with regulators ongoing, the BusinessDay news publication reports December 12, 2011 citing Wasim Saifi, StanChart’s global head of Islamic banking as telling reporters.