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General Knowledge on Islamic
Banking
Guest Lecturer
Abubaker B. Mayanja
abm@abl.co.ug
Contents
• What Islamic Banking is about
• How Institutions are Licensed
• Islamic Banking Products-
• How different is it from traditional Banking
What Islamic Banking is about
• Offering financial services without using the
conventional interest based system
• It is about savings and deposit products and
loans products
• Islamic Financial Institutions play an
intermediary role
• In Uganda, the Financial Institutions
(Amendment Act)-2016 provided for Islamic
Banking
How are the Institutions Licensed-
regulated
• Bank of Uganda is the regulator of Financial
Institutions in Uganda
– Tier 1- Commercial Banks
– Tier 2- Credit Institutions
– Tier 4- Microfinance Deposit Taking Institutions( MDI)-
MDI Act
 Institutions will be regulated by the Bank of Uganda
under the banking regulations, Capital adequacy,
governance and other macro prudential metrics to
ensure stability of the financial system
 Islamic Financial Service Board, Accounting and
Auditing Organisation for Islamic Financial Institutions.
Islamic Banking Products
• Assets- Murabaha[trade Finance],
Musharaka[JV partnership],
Mudaraba[Partnership, Ijara-[Leasing]
• Liability Assets- Istisna, Wakala[demand
deposits],
• Capital Markets-Sukuk Bonds
Differences
• In an Islamic Bank the rate of return on a
deposit is directly linked to the quality of the
bank’s investment decisions
• Profit and Loss Sharing vs fixed interest
• Islamic banks don’t charge pre determined
interest on loans and neither do they pay pre
determined interest on savings and deposits
• Islamic Banks do not participate in activities
related to Alcohol, Gambling [haram],

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General knowledge on islamic banking muk lecture

  • 1. General Knowledge on Islamic Banking Guest Lecturer Abubaker B. Mayanja abm@abl.co.ug
  • 2. Contents • What Islamic Banking is about • How Institutions are Licensed • Islamic Banking Products- • How different is it from traditional Banking
  • 3. What Islamic Banking is about • Offering financial services without using the conventional interest based system • It is about savings and deposit products and loans products • Islamic Financial Institutions play an intermediary role • In Uganda, the Financial Institutions (Amendment Act)-2016 provided for Islamic Banking
  • 4. How are the Institutions Licensed- regulated • Bank of Uganda is the regulator of Financial Institutions in Uganda – Tier 1- Commercial Banks – Tier 2- Credit Institutions – Tier 4- Microfinance Deposit Taking Institutions( MDI)- MDI Act  Institutions will be regulated by the Bank of Uganda under the banking regulations, Capital adequacy, governance and other macro prudential metrics to ensure stability of the financial system  Islamic Financial Service Board, Accounting and Auditing Organisation for Islamic Financial Institutions.
  • 5. Islamic Banking Products • Assets- Murabaha[trade Finance], Musharaka[JV partnership], Mudaraba[Partnership, Ijara-[Leasing] • Liability Assets- Istisna, Wakala[demand deposits], • Capital Markets-Sukuk Bonds
  • 6. Differences • In an Islamic Bank the rate of return on a deposit is directly linked to the quality of the bank’s investment decisions • Profit and Loss Sharing vs fixed interest • Islamic banks don’t charge pre determined interest on loans and neither do they pay pre determined interest on savings and deposits • Islamic Banks do not participate in activities related to Alcohol, Gambling [haram],