KCB Tanzania Ltd now introduces Islamic banking

KCB Tanzania Wednesday introduced a tailored made product known as KCB Amana Account, an Islamic banking account system that would not attract any interests to depositors.

The contract marking the possibility of launching of the new financial product next week was signed between the KCB Tanzania Managing Director, Heri Bomani and the Chairman of the Islamic Advisory Board, Sheikh Suleiman Amran Kilimire in Dar es Salaam.

KCB Head of liabilities Osman D. Ahmed told reporters that research conducted in the country recently has suggested existence of lucrative market for this kind of financial product as none of the sort was now being traded on Tanzania?s financial market.

Ahmed said such accounts were operated by other banks in many countries in the Middle East, Egypt, Kuwait, Britain, Pakistan, Iran and Northern Sudan Islamic faith prohibits it worshippers from earning interest or rent on their accounts in any way.

``Giving and receiving as well as witnessing the charge of rents are all prohibited. Thus an Islamic banking account system cannot pay any interest to its depositors, neither can it demand or receive any interest from the borrowers,``he elaborated.

Ahmed told reporters that it was with these values in mind that KCB- Tanzania in partnership with key Islamic scholars had developed a product that was specifically tailored to suit and meets the varying needs of the Islamic community.

He said on average 45 per cent of the Tanzanian population belongs to the Islamic community, while only 35 per cent were Christians and 20 per cent follow indigenous religions.

``Amana`` in literal translation connotes trust. In essence trust is the core of banking,`` he said.

KCB Tanzania officials said they first conducted numerous consultations with Islamic scholars and Ulamas, in order to fully establish a product that was well researched and trusted.

He said the established Islamic Advisory Board would be responsible in monitoring and guiding the Bank in managing the product to ensure it was compliant with the tenets of Islamic shariah.

SOURCE: Guardian