Prof Gatsi Asks BoG, Others to Embrace Islamic Banking As Alternative Model

Prof John Gatsi

Accra, Ghana, November 7, 2020//-Professor John Gatsi of the University of Cape Coast (UCC) has asked the regulatory institutions such as Bank of Ghana (BoG), Securities and Exchange Commission (SEC), National Insurance Commission (NIC) to embrace the risk-free Islamic banking as an alternative financial model in the country.

According to him, the interest and prospects of Islamic banking and finance as an alternative financing model is growing in the country, so they should show a regulatory and capacity building framework in that model.

Prof Gatsi made the call when he spoke at an Islamic banking forum organized in Accra organized by the Islamic Finance Research Institute of Ghana.

He explained that the desire to introduce Islamic banking in Ghana is closer as stakeholders have gained enhanced knowledge about this alternative banking.

Prof Gatsi who is the Dean of the UCC Business Shool, added that discussing Islamic banking in line with Ghana’s secular democratic values would be a welcome development if introduced in the country.

He therefore asked the regulatory bodies to own the roadmap and work with institutions interested in Islamic banking.

But Prof Gatsi urged that among the stakeholders, the BoG, SEC, NIC, and other religious groups should to understand the principles of Islamic banking within a secular democracy.

He also explained how Islamic banking may support joint ventureships, partnerships and project finance advised Muslims not to scale up their micro-level Islamic banking products without regulatory blessing.

He thefore advised those calling for Islamic banking products not to discuss the subject as a superior proposal to conventional banking and financial system but as an alternative to deepen financial inclusion and financial products diversification with choices.

Prof Gatsi noted that as the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930)  does not support Islamic banking in its current form, it needs some changes if Ghana has to introduce Islamic banking as an alternative to traditional banking in the country.

Prof. Gatsi said the fact that a political party has clearly stated this alternative banking in its manifesto for the 2020 elections means the principle has become even important to achieving financial products diversity, inclusion and alternative financing of government projects and businesses.

To him, this also requires more stakeholder engagement to provide clear understanding to all stakeholders within the financial sector and the general public.

Since Islamic financial products provide alternative access to business funding, Shariah board membership should be structured to include non-Muslims to remove fears which may not be founded.

The board membership ought to be people with expertise in Islamic banking including non-Muslims, he advised.

African Eye Report

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