Dar es Salaam — TANZANIANS will from today experience new waves in the banking sector as they start to enjoy the benefits of Islamic Banking, which forbids earning of interests in the banking transactions.
NBC Bank announced over the weekend the introduction of Islamic Banking window, which is consistent with Shariah law, just a day after another bank, Stanbic, introduced the same.
According to the NBC Bank Managing Director, Mr Christo De Vries, funds deposited in the accounts would be invested in businesses approved under Shariah Law. He said NBC's Islamic Banking, would start with two products, Cheque Account and Savings Account.
The Savings Account will have an embedded funeral cover (Takafol death benefit) included in monthly maintenance fees.
"The products are built around the Shariah Laws which govern the way in which Muslims live their lives and conduct their daily business including financial affairs," the MD said in Dar es Salaam.
The service, according to the bank, starts today and will be available in all their branches across the country and will be free for all people regardless of their religious affiliations.
"Muslims and non-Muslims globally are choosing to make use of Islamic Banking because it is a service that gives them the assurance investment of their money. All investments made under Islamic Banking are never associated with the traditional 'sin' industries such as alcohol, tobacco, gambling or pornography," said NBC Islamic Banking Board Chairman, Dr Mussa Assad.
In terms of account opening, Islamic Banking will be conducted in exactly the same manner as opening a conventional account. However, the product features will differ, based on Shariah principles, said NBC's Marketing Manager, William Kallage.
Tanzania is estimated to have over 40 per cent Muslim community. Mufti Shaaban Bin Simba, who witnessed the introduction of the service, said it was a relief for the Muslim community as they have for long suffered from high interest rates.
"The Almighty God forbids charging of interests. He destroys any economy that depends on interests and blesses offerings," the Mufti said.
He noted that interest rates were the reason for the collapse of world markets and subsequently followed by world economic crisis.
The Mufti said, as a leader of the Muslim Council of Tanzania (Bakwata), he would launch a special facility within the NBC Islamic Banking machinery that would enable Muslims to put their savings to accumulate money for the annual Holy pilgrimage of Hajj.