Economist and the Head of the Finance Department at the University of Ghana Business School, Dr. Godfred Bokpin has advised the Bank of Ghana not to rush in okaying Islamic Banking in Ghana.
[contextly_sidebar id=”lTBxePvsyuLSIwzZEmhKx1rsikNS2R7N”]He adds that authorities must engage in broad based discussions with relevant stakeholders to see the feasibility of adopting such a banking system in Ghana.
”In principle, there is no interest of ‘Riba’ in Islamic Banking but there is no capital that is free in this world so we have to look at the mode of compensation that they derive by trading off consumption so that people get the understanding that they are not getting interest but they go more in terms of profit sharing or partnership arrangements which may involve trading of ownership for the level of investment that they are bringing in” explained Dr Bokpin.
Adoption of Islamic Banking in non Islamic states came up strongly for discussion at the just ended IMF Spring meetings in Washington where industry players were divided on its implications for economies.
Unlike conventional banking, Islamic banking operates in line with the principles of the Shari’ah law which prohibits the payment or acceptance of interest charges for the lending and accepting of money.
This means that all loans contracted from such banks are interest free.
But Dr Bokpin is of the view that there must be a thorough discussion on Islamic banking owing to the challenges with access to credit in Ghana.
He is of the view that ”the discussions must be broad within a proper context so that we all have an understanding of Islamic banking so that when we are adopting it, we will know what exactly we are adopting.”
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By: Lorrencia Nkrumah/citifmonline.com/Ghana