Malawi approves Islamic Banking, Sharia-compliant services

Malawi government has approved to embrace the Islamic banking system which doesn’t demand any interest from the borrowers as is the case with non-Islamic banking systems.

Registrar of Financial Institutions Dalitso Kabambe , who is also Reserve Bank Governor, says in the approval document seen by Nyasa Times that this will only be through “Window Model Only.”

“This shall entail banks offering Islamic (non-interest) Banking products alongside conventional banking facilities,” says Kabambe.

He says in this regard; bank supervisors will shortly be engaging with each bank to prove guidance on reporting requirements of Sharia-compliant products and services.

“Once developed, the guidelines will be shared with each bank,” says Kabambe.

The International Monetary Fund (IMF) said in its recent report that Islamic finance has potential to spur inclusive growth but calls for its proper regulation and supervision.

In relation to this, the Muslim Association of Malawi recently invited an expert in Islamic Finance that during the meeting facilitated by  a South African Mufti  Ismail Ebrahim Desai,  a renowned scholar in Islamic Finance and Banking.

Key features of Islamic banking include a prohibition on interest, an emphasis on ethical standards that embrace moral and social values, and the overarching principle of fairness when handling liability and business risk. The system’s popularity in many North African and Middle Eastern countries stems from the less speculative nature of its products.

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Zude
Guest
This will not work in Malawi.Can anyone school me on how government will benefit from such banks.As far as am concerned government benefits a lot from these secular banks if i may call them such.To those who don’t know, if a bank makes a net profit of 1 billion,government takes 30% (ie.MK300 million as tax).Are the Islamic banks be remitting taxes when in operational.Am asking because by offering tax free loans that means palibe phindu lomwe adzipanga and ours is a very small economy to forgo taxes that this other banks pays.Ndiphunzitseni how Islamic banking operates,ine ndi mbuli pa nkhani… Read more »
Chisilamu Ntchenecho kaya
Guest

Choka Iwe Mzokoto, Your original Home Mzokoto is where Islam landed first before any other religion Malawi. So what t’s worrispme about Islam and its Economic System????? Kuzgobera Kurya Chuma cha “MARIKHO” through “INTEREST” eti????????????????????????????
kikikikikiki.

chenkakosya
Guest
Surely this bank will be loved by both Muslims and none Muslims alike. They hate Islam because of prejudice and stereotype that stems from years of brainwashing that has led many none Muslims to start believing that Islam means war. The truth of the matter, however is that the whole world is waging war against Islam. Reasons- Because Islam strongly objects or rejects western values which are incompatible with Islamic teachings. A woman might wear a too revealing miniskirt and walks into the street without any problem actually she is seen as more progressive but when a Muslim lady wears… Read more »
Bwana DC
Guest

thanks for your heartedly openness
articulating ideas based on logical reasoning

Mzokoto
Guest

Mayo ineeee! Malawi will become an islamic state and Sidik Mia will be its sharia law imposing imam. Kenako ISIS idzibwera mmbuyomo!

Hlabezulu Ngonoonda
Guest
Mzokoto, do not fear. Those working on this policy document are working very cautiously so that Christian sensibilities and fears are properly taken care of. Of course your fears are well founded because it is well known that our brothers and sisters in the Islamic World embrace a religious culture of hating and dismembering people of other faith other than Islam. That is why their institutions are “no gone zones” for those who they refer as infidels. If you read very carefully the above electronic article sentence by sentence, you will figure out that Mr. Dalitso Kabambe has explained that… Read more »
Bwana DC
Guest

yes mupsa tima zen zen simunati. even the world despite tarnishing the image of Islam has appreciated that the fastest growing religion in the world is Islam. tisakuwoneni mukubwela kuzabweleka dolla kuthawa ma interest anuwa anyani inu amene wasiya chipembezo chanu kma kusatila zmene mzungu wakuwuzan. nakha mu baibulo muli interest zoba?

Kay Bee
Guest

Thats what happens when ones brain is locked in a cabin. Thinking like below human capacity

Yussuf Sambo
Guest

Thanks Government and thanks Reserve Bank of Malawi, mwapangabwino kuloleza Islamic Finance kuti anthu azipsya mtima, amene zikumuwawa akakolope lake Malawi.

Mopiya Mulupare
Guest

What do Sharia-compliant services mean? The loans will be accompanied by application of Sharia -I guess. This one threatens me, honestly. In Christianity we teach love and forgiveness while Sharia (justice!) means hands and eyes off and stoning to death for offenders. I am not too excited with such banking services.

HABIE
Guest

Mopiya, Sharia is truth, dont take it negatively, in banking its like when you borrow MK10,000.00 you will be able to pay back same amount NO INTERESTS…. INTERESTS IN ISLAM IS FORBIDDEN…. THAT IS ONE IMPORTANT OF SHARIA.

Mtsiliza star
Guest

Next time think before you comment….

Kay Bee
Guest

But i wonder what others uses their brains for

willard
Guest

a gross misunderstanding kkkkk interpreting sharia according
to what george Bush said.

Yusuf Jonas
Guest
ALLAH AKBAR!!! DO YOU KNOW WHAT?? Islamic banking and the finance industry is growing at an annual rate of 20%.nternational giant banks such as HSBC (HSBC Amanah), Citi Bank (Citi Islamic)and Standard Chartered have already established their Islamic units and functioning in the Middle East region.Recently it is reported that the largest state owned commercial bank, Bank of Ceylon Intends to commence its Islamic banking unit in early 2008. All these new entries imply that this alternative banking system has drawn the attention of Muslims as well as non-Muslims due to its unique developmental characteristics.The underlying principle of Islamic banks… Read more »
Hlabezulu Ngonoonda
Guest
Mr. Yusuf Jonas, from your profound argument you should know that Hong Kong and Shanghai Banking Corporation (HSBC) bank is the one which in the last six years alone before 2015 (see http://wolfstreet.com) has been accused of and/or has admitted to: 1. Rigging just about every financial market imaginable (from LIBOR and foreign exchange markets to gold, silver and oil). 2. “Misselling” wholly inappropriate products such as interest rate swaps to “unsophisticated” customers. 3. Laundering money for Mexican drug cartels. This included transporting billions of dollars in armored vehicles, clearing suspicious checks, and helping traffickers buy planes through Cayman Island.… Read more »
Phiri
Guest

You have only forgotten that, after that, they finance terrorism, oh yes, al-shabaab, al-quaeda, ISIS, boko harram, islamic magreb etc. Useless butchers of mankind. What morals are there if you follow medieval laws concocted by someone who married a nine year old, Aisha

Kay Bee
Guest

Thinking like a Crocodile

Mundali
Guest

You have rightly described them Phiri

Umunthu
Guest

THats a good development for Malawi.

Nadzimbiri
Guest

Ife achikhrisitu mwayi obwereka nawo ndalamazi tizakhala nawo?

Kay Bee
Guest
Islamic Banking operates like any other bank only that: In ISLAM, interest is regarded as prohibited as it hinders transfering of wealth from the rich to the poor. Therefore, any person is eligible to transact with the bank without paying or receiving interest. Ukabwereka 1 million samanena kuti uzabwenza ndi interest ayi. Koma umabwenza 1 mitayo ndi share ya phindu lomwe wapanga from the 1 mita Read below What is ‘Islamic Banking’ Islamic banking is a banking system that is based on the principles of Islamic law, also referred to as Shariah law, and guided by Islamic economics. Two basic… Read more »
mgaiwa
Guest

Islamic banking is for all..except that u wont be required to pay interest however the business risks are shared between the bank and borrower

Yussuf Sambo
Guest

Aliyense atha kusungisa kapena kubwereka posayang’ana chipembezo chachikulu ndikusatila ndondomekoyake kuti mukamasungitsa simumalandila interest komanso mukafuna ngongole pobweza palibe interest you just share profit in a prescribed manner likewise you share losses

wakikiki
Guest

That i do not understand, coz if you keep money in the bank it means the bank will have to make use of the money by lending to the borrowers at an interest to make the bank operations going on and managing the staff by paying them salaries and the like. So if the bank is not doing that where are they getting the money to pay their expenses. And where is the said profit coming from . Please ndichoseni umbuli wangawu sindikudziwa.

Kay Bee
Guest

Here we go

take that the bank has started operating and has no any customer;

And 100 yous joined the bank aliyense wabwereka mita mita =total 100 million

bank will not charge interest koma ukamapanga phindu ndi mita yako bank izakhala ndi gawo ku phindu lako pamwamba pa 100 million yako,, Ukakhala sunapange phindu bank izangopereka byebye osaitanisa ndalama ya profit ie, uzabwenza 1 mita yokha….

Nde kuti from ur profit azizalipira antchito awo,

Ngati sunamvese ask again

Malume
Guest

The secret is that you agree a monthly rental at the beginning so that it remains fixed even when the interest rates are changing. Thus the banks pegs the interest rates at a higher rate to come up with the rental, but this is not communicated to the customers. It is a bit expensive when the interest rates are not stable like in our country. And the facilities are given to big businesses which can not easily fail.

Billy Chilewani
Guest

Let this alternative banking be in place to rattle the other multi-billion profit making banks which have left Malawians poorer than before independence. The other rules we will learn them as we go along as long as there is no hidden agenda of other terrorist groups coming to Malawi and start butchering us in broad day light.

Kay Bee
Guest

No hidden agenda its pure banking. The rules of the game are very simple and straight.

u borrow money you pay back the borrowed plus share of profits made from the borrowed money.
If no profit at, cul, pay back the money u borrowed only and dont pay any interest or additional money

Zude
Guest

Hahahahaha ndiye kupanga share profit yomwe wapanga ndikupeleka interest zikusiyana pati??Thanks Kay bee wanditsegula mutu,lnterest charged in another way..Tell me what happens munthu akakanika kubwenza??

John
Guest

I think those that have approved this bank know better than you. You may have negative attitudes towards Islam, but know that it will perfectly serve Malawians regardless of one’s religion. I am just happy that the bank’s principles are in line with our financial status. Thanks

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