Business
Ethiopia: Regulator denies accreditation to Islamic banking
Ethiopia has denied accreditation to what would have been the country’s first Islamic banking service, citing new banking and terrorism laws.
Zam-Zam Bank applied for a zero-interest banking service compatible with Muslims, however, the National Bank of Ethiopia, which supervises and regulates all banks in the country, declined to assent to the application.
The government of Ethiopia last year issued a new banking law which outlaws interest-free Islamic banking and authorizes authorities to block money suspected to finance terrorism.
The refusal to licence the service also dashes the hopes of more than 6,000 shareholders of establishing a new Islamic bank after years of dispute with the regulator.
The “interest-free” banking project with an initial capitalization of US$57 million will now be forced to dissolve.
