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The National Bank of Ethiopia (NBE) is putting the finishing touches to the final draft of the directive for interest-free banking in Ethiopia and it is scheduled to come out at the end of next month. Non-interest bearing banking made its début in the banking proclamation of the country as late as 2008, thereby bestowing upon NBE the power to come up with the working directive and to regulate the institution entering the sector to work under this concept.

After the proclamation was issued the NBE put together a draft directive which was circulated among the existing banks and those under formation.

The banks were scheduled to return their comments on the directive at the latest by last June 21.

Jemal Muzeyin, vice chairman of the organizing committee for the first interest-free banking to apply for license in Ethiopian, Zamzam bank, told The Reporter that the bank had waited on the sideline for almost three years. Zamzam has been there from the early days of the proclamation up until the draft directive and now the working form of the directive, which is expected to come out by end of this quarter, is all that is left to kick off operation, he said.

He said that the bank has prepared its prospectus and distributed out its pledge forms in January 2008, which helped to mobilize more than 1000 potential shareholders. Jemal said that in spite of the immense potential for share sales, so far the bank did not start collecting capital from the individuals that pledged to buy shares; not to keep the shareholders' capital idle untill the final directive arrives.

“Right after the directive comes out, we will start to float shares to the public,” he said. However, Jamal added that Zamzam delayed floating its shares for sales deliberately until the directive was ready, but NBE had given the green light to start much earlier.

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