An Islamic bank with a wider vision to help Tanzanian citizens.

The Dar es Salaam based Amana Bank Limited (ABL) which is fully owned by Islamic community in Tanzania and follows Islamic laws, is just almost one year old now. Within the shortest period of its operation in the country, the bank has shown signs of fast growing bank in the country that takes the interest of wider population of its customers regardless of their religious affiliations. The current Managing Director of the bank, Dr. Idris Rashid who has a vast experience in the banking sector in the country talks of the bank's services and other developments in an exclusive interview with this blog.

QUESTION: As a banker, what challenges do you face?

Ans: Amana Bank Limited is the first fully Sharia compliant bank in Tanzania which was granted a provisional license by the Bank of Tanzania on 4th February 2011. Two weeks later, the bank was incorporated with an authorized share capital of Tsh. 100 billion and paid up capital of Tsh. 21.5 billion. The bank started with one share holder and up to now it has managed to accumulate ten shareholders who jointly consulted a company for a business plan focussing on business and its way forward and took it to the Bank of Tanzania for approval.

QUESTION: With how much capital did you start your business?

Ans: In May 2011, we started with initial capital of Tsh. 21.5 whereas the minimum requirement is Tsh. 15 billion. After certifying the initial capital, the bank was given a full registration certificate by Business Registration Licence Authority (BRELA)

QUESTION: How many branch offices do you have currently

Ans: The bank is currently operating under one branch office located at Tandamti street at Kariakoo business suburb. But we have plans of opening other branch offices in locations as follows, by end of this month the bank is expected to open one branch office along Nyerere road in Dar es Salaam, and the main office at Golden Jubilee House in April, in May at Lumumba street all in Dar es Salaam. In June in Arusha city and in July in Mwanza city, whereas we are also planning to open a small branch office at Mbagala on the ouitskirts of Dar es Salaam city. In big branch offices, the bank is expecting to extend its service deliveries to its customers over the time up to 22:00 hours in the evening.

QUESTION: What credit rate does Amana Bank charge when a customers borrows money from the bank?

Ans: Since the bank is operating by following Islamic Sharia laws, we do not charge our customers credit rate for loan repayment as this is regarded as an illegal act before the lord God, and instead we do business with our customers. Whoever deposits with our bank in either current or savings account, we take money then we do business and after attaining the profit then we agree on how to divide it among us. For the case of a loan, what we do to our customers and our staff is that, “we do not give them cash money” and instead we buy the particular thing in need for which a loan is needed such as a Car, Television, Refrigerator or any business products for the case of business people according to their wish. For instance, if one wants a car and wishes to take a loan in order to acquire it, the bank guarantees for its price upon presentation of the proforma invoice. Le's say if the car is sold at Tsh. 7 million, then this would be given to him at the price of Tsh. 9 million. The interest accrued is for the bank once entered in agreement for loan repayment which is paid by installment. The same thing applies to business people, we do make a bulk purchase of the products needed for their businesses according to the costs verified. After the purchase of such goods is done by then bank, they are later handed to a customer for an agreed hire purchase price which is refunded according to the terms of agreement.


The Managing Director Dr. Idrisa Rashid

QUESTION: What do you call this type of business?

Ans: The business is called 'Murabaha'. It is a kind of a contract entered between a bank and a customer in need of a loan who must have an account with the bank as one creteria. The account can either be current or sarvings depending on the type of a bank account we have here. Besides having an account, a customer must also have a security bond as a collateral which would enable them to qualify for this transactions. So you see, we are not far different from what other banks are doing in terms of security for any transaction entered on behalf of the bank.

QUESTION: As a banker, what challenges do you face?

Ans: Challenges in every business is normal, and since we are the first established Islamic bank in the country which follows Islamic laws, we really have to take time in order to educate people on how the bank operates as our business is basically conducted in accordance to Islamic laws. “We must educate people in order to get to know all the operations in the bank.

QUESTION: How do you ensure your bank's laws are strictly followed?

Ans: The bank has established the Board of Directors which is made up of prominent business people and professionals from different backgrounds and provides guidance to the Bank. The Bank has also the Sharia supervisory Board which has to see that all that is being conducted with the bank goes alongside by the Islamic laws, the Board also approves all products, services and other processes as required such as auditing and other procedures are to be followed accordingly. The Sharia supervisory Board also has the responsibility of ensuring that the Muharaba loan contract which has seven steps is being strictly observed and followed. This Board is made up of prominent Islamic scholars drawn from within and outside Tanzania who works more closely

QUESTION: How do you fair in competition with other bankers?

Ans: Approach in competition with others is a normal think as far as Banking business activities is concerned. But for the Amana Bank Limited, we are proud that we provide the services by following the Islamic Sharia laws, but currently we are proud as our bank is unique in terms of operation and therefore we do not see if there is one to compete with us.

QUESTION: Are you engaged in corporate responsibilities?

Ans: At the moment the bank is in its infancy stage, in view of this, therefore we are not yet in a position to engage ourselves in such activities. It needs more preparations, and these would be in future as we move on, we expect to join the workforce into committing such social responsibilities for the benefit of our nation.

QUESTION: What is your prospects in terms of maintaining good relations?

Ans: We are prospecting to do other services related to SMS banking and Internet banking, we are also planning to form agents who would work on behalf of the bank in order to help push on our banking activities in the country. In this way, we expect to have big outreach associating with M Pesa agent and Tigo pesa as these are scattered all over the country. We are sure as the transactions will be made smoothly.