BoZ still working on Islamic finance

THE Bank of Zambia (BoZ) says it is working out modalities to roll out Islamic banking in the country after the central bank launched Islamic finance guidelines in 2013 to ensure strict adherence and compliance with the rules and principles of Sharia.
Islamic finance is currently practised in over 50 countries worldwide, and in many countries, it co-exists with conventional banking and is not limited only to the Muslim population.
BoZ governor Denny Kalyalya said the central bank is still doing some work on the Islamic banking.
“We have not set any time frame when we can actually roll it out but, a lot of work has gone into that,” Dr Kalyalya said in an interview at the just-ended 51st Zambia International Trade Fair.
He noted that Islamic finance is a new way of doing business and a lot more needs to be done.
The BoZ has embarked on a process of developing a regulatory framework to facilitate the introduction of Islamic finance.
The process involved extensive internal and external consultations with various stakeholders, including Government.
The framework was reviewed by the Islamic Financial Services Board, which is the standard setting body in matters of Islamic finance.
Meanwhile, BoZ is targeting to grow international reserves to four months of import cover.
Dr Kalyalya, however, said with the constraints the country is facing, the bank is yet to meet the target.
“So we are somewhere between three months of import cover. Now, this is a moving target because it depends when you get reserves.

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