Be proactive and define the roadmap on Islamic banking – Prof. Gatsi to BoG

Dean of the University of Cape Coast Business School, Professor John Gatsi, has requested the Central Bank to provide a clear regulatory framework that will allow the integration of Islamic banking to Ghana’s financial space.

According to him, the Bank of Ghana is “giving assurance as if they have the capacity to give license but as it is now, they don’t have because they don’t have a regulatory framework for Islamic banking. You cannot give license to people to operate Islamic banking when very clear regulatory framework is not developed. That must be done and that is the job of the Bank of Ghana”.

Speaking at the Islamic Banking and Finance forum in Accra, Professor Gatsi bemoaned that, the current Act on deposit-taking institutions does not favour Islamic banking in the country since it also aims at investing in immovable properties, thereby, calling for a new regulatory policy that will allow them to operate.

“The banks specialized deposit-taking institutions Act 2016, Act 930, Section 19 talks about that banks are not supposed to invest in an estate, immovable property in general, unless, it’s for the purposes of housing for staff and premises…but Islamic banking will invest in immovable property, so clearly, it’s not giving the chance to Islamic banking to operate so if you indeed want it, you need to create a window and that window has to have a regulatory platform which is not in existence”, he added.

Islamic banking aims at providing a profit saving deposit, interest free loan to foster property and business development.

Comparing with other countries to check whether or not the penetration of Islamic banking in the Ghanaian economy will work out, he asserted that, most non-Islamic countries which have Islamic banking operating in their economy was as a result of the regulator facilitating the process.

Professor Gatsi further averred that, “the regular was proactive, saw the benefits, and alternative Islamic banking could provide to the banking space and they took the decision… some of the areas, the regulator was very frank to indicate that they don’t have capacity, regulatory framework and they quickly build capacity and put in place the regulatory platform that actually brought into being the Islamic banking, products and services in those countries”.

When rolled into operation, it will curb the high unemployment rate among the teaming youth in the country, he said.