Interest-Free Banks are not Happy about the Recent Mandatory call to Invest 1% Bond from the Central BankInterest-free banks are not all for the mandatory call of NBE that demands financial institutions to invest 1% of their outstanding credit on a bond issued to support the Development Bank of Ethiopia (DBE).
“We cannot invest a penny on something that pays interest, including bond, as it would be against Shariah’s principle,” said Kedir Abas, Strategy Director of Zamzam Bank. “Mudrabah is one possible way as it enables us to invest in Shariah-compliant project financed by the Development Bank of Ethiopia with zero interest and share the profit later,” he added.
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