Capital Ethiopia Newspaper

Islamic bank finished before it starts

ZamZam, the under formation Islamic bank called for an extraordinary meeting to discuss its future with shareholders.
Although it hoped to be the Nation’s first Islamic bank, ZamZam now faces disbanding the share company because of lack of approval from the National Bank of Ethiopia (NBE).
Recently NBE issued a directive stating that Islamic banking operations are permissible only as part of other services and thus a fully Islamic bank is not allowed. 
According to sources, the board of ZamZam held several discussions about the future of the bank before it called the extra ordinary assembly that will be held on June 2, 2012.
There were two options proposed by the board members: dissolve the share company or continue Islamic banking with other financial services, sources said.
Recently one of the founders and board members of the Islamic bank told Capital that the board has to leave the final decision about the bank’s next step to the shareholders.
One shareholder told Capital that she would withdraw from the bank if it deviates from its original mission.
“I bought the share with the understanding that I was investing in an Islamic bank, and I will never agree to additional operations,” she added.
Ethiopia’s pioneering interest-free bank, ZamZam, had held a general assembly in April, 2011 but it has been unable to open the door for over a year. First the bank had to wait for the go ahead from the NBE and now it is faced with a new directive endorsed by the central bank.
At the previous general assembly held at the Millennium Hall, founders had hoped to collect 250 million birr from selling shares but in fact they collected 330 million birr. Each share is worth 1,000 birr.