{{The Ethiopian government has denied accreditation to what would have been the country\u2019s first Islamic banking service, citing new banking and terrorism laws.}}<\/p>\n
According to a statement issued June 2 by its board of directors, Zam-Zam Bank applied for a zero-interest banking service compatible with Muslims.<\/p>\n
However, the National Bank of Ethiopia, which supervises all banks in the country and is directly under prime minister Meles Zenawi, declined to assent to the application.<\/p>\n
The Ethiopian government last year issued a new banking law which outlaws interest-free Islamic banking and authorises authorities to block money suspected to finance terrorism.<\/p>\n
The refusal to licence the service also douses the hopes of 6,800 shareholders of establishing a new Islamic bank after years of dispute with the National Bank.<\/p>\n
The \u201cinterest-free\u201d banking project with an initial capitalisation of $57 million will now be forced to dissolve.<\/p>\n
\u201cThey told us it is impossible to establish a full \u2018zero interest rate\u2019 bank and rather advised us to create a sub-window to give the zero-interest rate service along with a regular banking operation,\u201d a board member, who declined to be named due to his dealings with another private bank, told the Africa Review\u2019s reporter.<\/p>\n
The potential liquidation of Zam-Zam coincides with growing rancour between the government and the country\u2019s Muslims over the last four months.<\/p>\n
Since March, Muslims in the Horn of Africa country have been protesting government interference in affairs of their religion.<\/p>\n
The Ethiopian government has recently tightened security and accused some Muslim groups of favouring extremism and terrorism under the cover of religious freedoms.<\/p>\n
After Zam-Zam Bank two years ago applied for a licence, the government issued a revised Banking Bill which excludes the formation of a banking service affiliated to religion.<\/p>\n
The revised law on grounds of blocking the flow of \u201cterror financing\u201d authorises the government to access details of any suspected money transfer deposit or other transaction.<\/p>\n
Mr Ibrahim Miftah, a financial expert, said such kind of interest free banks are viable in Islamic economics and operate in accordance with Sharia.<\/p>\n
\u201cThe idea is developed by modern scholars of Islam and seeks not only to enforce Islamic regulations but also to implement broader economic goals and policies,\u201d Mr Ibrahim said.<\/p>\n
Muslim banking revolves around the main tenets of Islam; charitable giving (zakat), borrowing and lending without payment of fixed interest (riba), insurance, inheritance, and socially responsible investing.<\/p>\n
Since most other religions also favour charitable giving and socially responsible investing, the key difference from other financial services is the non interest rule.<\/p>\n
At least 60 countries practice Islamic banking, mainly in the middle East countries.<\/p>\n
Ethiopia has so far licensed 15 private banks.<\/p>\n
NMG<\/p>\n","protected":false},"excerpt":{"rendered":"
{{The Ethiopian government has denied accreditation to what would have been the country\u2019s first Islamic banking service, citing new banking and terrorism laws.}} According to a statement issued June 2 by its board of directors, Zam-Zam Bank applied for a zero-interest banking service compatible with Muslims. However, the National Bank of Ethiopia, which supervises all […]<\/p>\n","protected":false},"author":2,"featured_media":2000051503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[99],"byline":[170],"hashtag":[],"class_list":["post-13723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-greatlakesnews","byline-igihe"],"bylines":[{"id":170,"name":"IGIHE","slug":"igihe","description":"","image":{"id":0,"url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&f=y&r=g","alt":"Default avatar","title":"Default avatar","caption":"","mime_type":"image\/jpeg","sizes":[]},"user_id":8}],"contributors":[{"id":170,"name":"IGIHE","slug":"igihe","description":"","image":{"id":0,"url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&f=y&r=g","alt":"Default avatar","title":"Default avatar","caption":"","mime_type":"image\/jpeg","sizes":[]},"user_id":8}],"featured_image":{"id":2000051503,"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","alt":"","caption":"","mime_type":"image\/jpeg","width":0,"height":0,"sizes":{"thumbnail":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","width":1,"height":1},"medium":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","width":1,"height":1},"medium_large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","width":1,"height":1},"large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","width":1,"height":1},"full":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton13723.jpg","width":0,"height":0}}},"_links":{"self":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/13723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/comments?post=13723"}],"version-history":[{"count":0,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/13723\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media\/2000051503"}],"wp:attachment":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media?parent=13723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/categories?post=13723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/tags?post=13723"},{"taxonomy":"byline","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/byline?post=13723"},{"taxonomy":"hashtag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/hashtag?post=13723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}