Towards Islamic banking in Uganda: an analysis of its regulation, prospects and challenges in a secular legal environment

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Kamapala International University
Islamic banking in Uganda derives its existence and power from the Financial Institutions (Amendment) Act 2016. The concept of Islamic banking is a new phenomenon in the banking system of Uganda’s secular environment. Currently this concept is mainly regulated by the Financial Institutions (Amendment) Act 2016. This thesis analyzes the Islamic banking regulatory framework, prospects and the challenges which are likely to impede its operations. The thesis explains the fact that although Islamic financial institutions have to operate in accordance with Shari’ah principles, this may be restricted by the Central Bank’s regulations and policies especially the Financial Institutions (Islamic Banking) Regulations 2018 and other regulations. In conducting the study the researcher relied on qualitative methodology. Accordingly, data was collected using both primary and secondary source of information. The key findings show that the adoption of Islamic banking is likely to have some legislative challenges which cannot effectively serve the true operation of Islamic banking. There are laws and procedures that are likely to run counter to the principles of Islamic banks which if applied to them could cause undue unfairness to the Islamic banks and which would defeat the whole purpose of establishing Islamic banking in Uganda. The thesis recommends that to ensure a proper and supporting Islamic banking legal system in Uganda, amendments in existing laws, which are likely to be repugnant to Islamic banking, are required to promote Islamic banking law compliant products.
Dissertation available in full text (soft and hard copy)
Islamic banking, Legal environment