Malawi: New rules pave way for participation banking
The southeastern African country of Malawi has drafted guidelines for participation banking, a first as it embraces an Islamic banking system which charges no interest, unlike conventional banks.
"We have drafted the guidelines which were distributed to stakeholders for comments, which is the initial step," Mbane Ngwira, spokesperson for the Reserve Bank of Malawi, told Anadolu Agency on Wednesday.
"After consolidation of the comments and any other acceptable recommendations, the guidelines will be finalized and submitted to the government for vetting."
Once approved by parliament, participation banking will be a new and innovative solution to modern money management in Malawi. Other countries in southern Africa such as Zambia, Zimbabwe, and South Africa have all embraced the system.
The Muslim Association of Malawi (MAM) hailed the new guidelines, calling them long overdue, as over 30 percent of Malawi's population of 17.5 million is Muslim.
The guidelines are built around Sharia Islamic laws which govern the way Muslims live their lives and conduct their daily business, including financial affairs.
"Sharia law lays down [guidelines] for the management of money, one of these guidelines being the absence of interest on current and savings accounts," said Sheikh Dinala Chabulika, the group's spokesman.
He said although this service will mostly appeal to Muslim customers, it is open to everyone regardless of their faith.
Participation banking "will be an alternative to conventional banking. Muslims and non-Muslims globally are choosing to make use of Islamic banking because it is good," he said.