ZamZam, the under formation Islamic bank officially announced that it failed to launch its operation of interest free banking.
The board of directors of the bank told shareholders, the full Islamic banking operation will not be visible due to the National Bank of Ethiopia (NBE) directive that was ratified in September 2011, barring Islamic banking.
On the first extra ordinary meeting held at the Addis Ababa Exhibition Center on Saturday, June 2 the board offered three options for the share holders; undertaking Islamic banking injecting their capital on other banks and open a window, dissolving the bank and disburse back the raised capital or involve on other investment sector with the collected money.
Most of the participants on the meeting supported the idea to be involved on other investment than return the capital or do the Islamic banking with other banks on a window.
However most complained that NBE’s decision is against the country’s constitution that allow citizens to involve in any business. “The central bank’s decision is against our religious right,” the participant said.
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 the board of directors, the board of ZamZam held several discussions about the future of the bank before it called the extra ordinary assembly that was held on Saturday June 2, 2012. They said that in the past nine months the board members conducted several discussions with government and NBE officials to get Islamic banking permit but to no avail. “We have also written a letter to Prime Minster Meles Zenawi to get solution on the issue but we did not get any response yet,” the board of directors explained.
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..
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.