Plans to encourage Islamic banking faces setback

Efforts by the Bank of Ghana to encourage the establishment of an Islamic bank have been dashed as the provisional license that was granted to a Saudi Arabia-based financial institution is withdrawn.

Joy Business is learning that the central bank withdrew the license it gave to Makkah after the company failed to meet key requirements for the granting of a full operation licence on two occasions.

Under the current banking laws, an institution that is granted provisional license has about six months to recruit personnel, get the necessary offices for its operations, meet the regulatory capital requirement, before it would be given the green light to operate.

However Joy Business understands that the bank in 2014 and 2015 failed to meet some of the critical requirements that would have enabled it open its doors to the public.

The Bank of Ghana has over the past three years maintained that it is working to encourage the establishment of an Islamic Bank in Ghana.

Islamic banking is based on the principles of the Islamic law known as Shariah and guided by Islamic economics which forbids the payment of interests.