Salaam Bank opens Uganda’s doors to Islamic banking

Salaam Bank Ltd, a subsidiary of the Djibouti based Salaam Group became the first commercial bank to get Bank of Uganda’s nod to operate under the Islamic banking system.

In a statement issued on Friday, the Deputy Governor of the Bank of Uganda, Michael Atingi-Ego’s issuance of the first Islamic Banking licence to Salaam Bank Limited follows President Yoweri Museveni’s signing of the Financial Institutions (Amendment) Act 2023 last month, that paved way for the introduction of Islamic Banking in Uganda.

“The Bank of Uganda is committed to providing oversight and support to Salaam Bank Limited as it embarks on this new journey. Islamic banking has the potential to make a significant contribution to the development of Uganda’s financial sector,” Atingi-Ego said.

The licence was handed over to the shareholders of Salaam Group which operates the Djibouti-based Salaam African Bank which entered the Ugandan market in August 2022 with the acquisition of Top Finance Bank.

The brief ceremony held at Bank of Uganda headquarters in Kampala also marked the official change of the commercial bank’s name from Top Finance Bank to Salaam Bank.

 “It has stable and sound financial backing of the Salaam Group. It’s open for business and shall strive to strengthen Islamic banking not only in Uganda but also throughout the East African region,” the group said in the statement.

Salaam group also has presence in Kenya, Somalia and Ethiopia where it offers Islamic banking products.

In a separate statement issued last week, the Office of the Supreme Mufti argued Islamic banking will be instrumental in addressing the strategic bottlenecks that have constrained Uganda’s socio-economic development since her independence.