Islamic banks now ask for regulatory board

Local Shariah-compliant banks have proposed the formation of an independent national board to regulate Islamic banks as well as other conventional banks offering Islamic products. This, they said, will ensure that they operate according to the Islamic principles, says Chief Kadhi Sheikh Hammad Kassim.

Licensed mid last year, Islamic banks now command a market share of 1 per cent and this is projected to reach 10 per cent in the next five years, according to the Gulf Africa Bank CEO Najmul Hassan.

Grow our deposits

Ms Rose Detho, who is in charge of the banks supervision arm at the Central Bank of Kenya, last week said the concept has succeeded adding that the two fully compliant Shariah banks - First Community Bank and Gulf Africa Bank - have combined assets of Sh8 billion and Sh5 billion deposits only a year after they were licensed.

“We have managed to grow our deposits to Sh4 billion in less than a year, which to us is a big success,” said Mr Najmul. Five other conventional banks, according to Ms Detho, have introduced Shariah-compliant products.

Mr Najmul spoke in Mombasa at the weekend when the bank opened its second branch in the town. GAB now has 12 branches in the country, seven of which are in Nairobi.

“We look forward to having a total of 15 branches by the end of this year,” he said, adding that the focus will now be in other regions where there is a huge unbanked population.