We agree with the author’s acknowledgement that the Bank of Ghana’s decision to rebrand Islamic Banking as Non-Interest Banking was a strategic move to avoid needless controversy.

It is important, however, to clarify that this rebranding was not merely cosmetic or unilateral. The decision by the Bank of Ghana to rebrand "Islamic Banking" as "Non-Interest Banking" (NIB) was a deliberate and inclusive move, aimed at avoiding controversy and promoting financial inclusion.

The rebranding was a result of stakeholder engagement with leading Muslim and Christian organisations in the country, who recognised that the name "Islamic Banking" might inadvertently exclude non-Muslims. The stakeholders agreed that the principles of Islamic Banking, which promote financial inclusion and economic growth, are beneficial to all citizens, regardless of their faith. Therefore, a neutral name was adopted to avoid confusion and ensure that everyone feels welcome to participate.

We therefore disagree with his suggestion that the rebranding has created unnecessary technical confusion. The use of alternative names such as Non-Interest Banking, Participatory Banking, Abrahamic Banking, and Ethical Banking is not unique to Ghana and is widely recognised in other jurisdictions. The stakeholders involved in the engagement process were clear that Non-Interest Banking was another name for Islamic Banking, and the Bank of Ghana's adoption of this name is a pragmatic approach to promoting financial inclusion and avoiding controversy.

 Statutory Basis and Use of AAOIFI Standards

The concern that the definitions in the draft Guidelines are legally unmoored overlooks the flexibility already embedded in Ghana’s existing banking framework. Ghana does not require a separate “Islamic Banking Act” to accommodate non-interest banking. The Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) expressly recognises non-interest banking as a permissible banking activity under section 18(1)(r), placing it firmly within Ghanaian statutory law. This approach is consistent with international practice: jurisdictions such as the United Kingdom, Nigeria, and Kenya operate Islamic or non-interest banking within their general banking laws, supplemented by regulatory guidelines, rather than through standalone legislation. The use of established contractual terms such as Mudarabah, Gharar, or Maysir does not create a legal vacuum; rather, it provides technical clarity for products that are already globally recognised and commercially deployed within secular legal systems.

Equally, the reference to AAOIFI standards does not amount to an imposition of religious law on Ghanaian courts. AAOIFI standards are accounting, auditing, and governance benchmarks, not binding legal rules, and they function in much the same way as International Financial Reporting Standards (IFRS), which Ghana already applies without controversy. Their role is to ensure consistency, transparency, and comparability across jurisdictions, not to displace domestic statutes such as the Companies Act, 2019 (Act 992). In the event of a dispute, Ghanaian courts would continue to apply national law, interpreting contracts within the framework of Act 930 and other relevant statutes, while drawing on AAOIFI standards only as technical guidance where appropriate. Far from creating confusion, this layered approach reflects well-established regulatory practice and allows non-interest banking to operate coherently within Ghana’s secular legal and judicial system.

Prohibition of Religious Symbols and Inclusivity

The prohibition of religious symbols in Paragraph 85 of the NIB 2025 Guidelines is intended to promote inclusivity and avoid confusion, rather than create a signaling problem. The target demographic for Non-Interest Banking is not limited to Muslims, but rather includes all individuals seeking ethical and non-interest financial services. The experience in Nigeria, where Non-Interest banks such as Lotus Bank, Alternative Bank, and Summit Bank operate without explicit religious branding, suggests that there is no inherent signaling problem.

The absence of explicit religious symbols or terminology does not necessarily hinder the ability of these banks to attract customers seeking Non-Interest financial services. Instead, it allows them to focus on providing high-quality financial services that appeal to a broader customer base. The Bank of Ghana's approach is aimed at promoting financial inclusion and stability, rather than creating unnecessary barriers to entry. By focusing on the underlying principles of Non-Interest Banking, rather than religious symbols, the industry can grow and develop in a way that benefits all stakeholders.

Learning from Past Failures

The past failures of Non-Interest (Islamic) banking initiatives in Ghana, such as Makkah Bank, Salam and GMIF microfinance as he claimed, are often cited as reasons to doubt the current effort. However, these failures were largely due to the absence of a clear regulatory framework and guidelines, which made it challenging for these institutions to operate effectively. The lack of guidance led to uncertainty and ultimately, their demise.

The current initiative is different, as it is backed by the recent exposure draft, namely the Guideline for the Regulation and Supervision of Non-Interest Banking, 2025. This Guideline provides a clear roadmap for operators, ensuring that they operate within established standards and best practices. With these guidelines in place, the industry is better positioned to succeed, and the lessons learned from past failures have been incorporated to create a more robust and resilient framework for non-interest banking in Ghana.

Competition Beyond Religious Differentiation

The notion that non-interest banks must rely on religious differentiation to compete is flawed. In reality, customers are driven by value proposition and service quality, not just religious identity. In Nigeria for example, non-Muslims, including Igbo traders, are among the largest customers of some non-interest banks, prioritizing benefits and services over religious affiliations.

This shows that non-interest banking's success depends on offering competitive financial solutions, not just targeting a specific religious group. The focus should be on providing attractive services that appeal to a broad customer base, rather than relying on religious differentiation.

Definition of Riba and Regulatory Safeguards

The claim that the guideline's definition of Riba is an oversimplification that creates regulatory risks is unfounded. The guidelines have built-in checks and balances, such as the NIBAC and NIFAC, which review transactions and products to prevent banks from misrepresenting their services. This ensures that banks operate within the established framework and prevents them from exploiting loopholes.

Regarding the potential friction with the Ghana Revenue Authority (GRA), we believe the Bank of Ghana will consult with GRA to ensure alignment on tax issues. The Bank of Ghana will definitely work with GRA to address tax implications and ensure that the guidelines do not lead to double taxation. This collaborative approach will mitigate any potential risks and ensure a smooth implementation of the non-interest banking guidelines.

Pressure On NIBAC?

The concern about NIBAC's potential bias is mitigated by the fact that final product approval rests with NIFAC at the Bank of Ghana, providing an additional layer of oversight and ensuring products meet regulatory standards.

NIBAC and Access to Justice

The portrayal of NIBAC’s role as an ultimate judicial body is misleading. NIBAC functions as an internal advisory and dispute-resolution mechanism within the bank, but its existence does not prevent customers from seeking external adjudication through the Non-Interest Financial Advisory Council (NIFAC) at the Bank of Ghana or through Ghanaian courts. Like in many jurisdictions, out-of-court internal resolution is encouraged for efficiency, but customers remain fully entitled to pursue independent legal remedies, ensuring that principles of natural justice and fairness are preserved.

Liquidity Management and Capital Market Development

The claim that the draft Guidelines create a liquidity management vacuum for non-interest banking institutions is inaccurate and overlooks ongoing policy planning by the Bank of Ghana. There are well-established Shariah-compliant liquidity management instruments globally, including sovereign Sukuk and other liquidity facilities, which regulators routinely adapt to local contexts. The Bank of Ghana has already indicated that it is working in collaboration with the Securities and Exchange Commission, including study visits and technical engagements, to ensure that a non-interest capital market such as a Sukuk market is introduced alongside non-interest banking. This demonstrates that liquidity management is not being approached in a policy vacuum, but as part of a phased and coordinated financial market development strategy to support systemic stability and competitiveness.

Nigeria’s Experience: Growth, Not Marginalisation

The assertion that Nigeria’s non-interest banking experience has been marked by slow development and regional concentration is not borne out by current realities. In fact, non-interest banks in Nigeria are among the fastest-growing financial institutions in the country, with examples such as TAJ Bank, Lotus Bank, and The Alternative Bank recording strong expansion in assets, branches, and customer base. The claim of regional concentration is also overstated: of the five licensed non-interest banks in Nigeria, only Jaiz and TAJ can reasonably be described as having northern origins, while Lotus Bank, The Alternative Bank, and Summit Bank were established in southern, largely Christian-majority regions. This demonstrates that non-interest banking in Nigeria has evolved beyond regional or religious clustering and has achieved national reach, undermining the suggestion that the “non-interest” approach inevitably leads to marginalisation or slow adoption.

Late Payment Provisions and Risk Sharing

The concern that the late-payment provision structurally weakens non-interest banking institutions overlooks the fundamental difference between non-interest banking and conventional lending. Non-interest banks do not primarily extend cash loans and wait for repayment with added charges; rather, they engage customers through asset-based financing and profit-and-loss-sharing arrangements in which the bank is directly involved in the underlying transaction or business risk. In such structures, delays are often linked to the performance of the financed asset or venture, which the bank already shares, reducing the need to rely on punitive late-payment charges as a core risk-management tool. Consequently, the prohibition on profiting from late-payment penalties does not create the same economic distortion suggested, because non-interest banking manages credit risk through partnership, asset backing, and transaction monitoring, rather than through penalty interest as a revenue or enforcement mechanism.

Final Position: No Identity Crisis

The conclusion that the Exposure Draft suffers from a fatal “identity crisis” and therefore risks producing a “zombie” industry is overstated and not supported by comparative regulatory practice. While it is reasonable to expect further guidelines and refinements as the market develops, the success of non-interest banking does not depend on enacting separate, “interest-specific” legislation or a standalone Sukuk law. In jurisdictions such as Nigeria, the United Kingdom, and Germany, Sukuk have been issued under the same legal and securities frameworks that govern conventional bonds, with regulatory adaptations rather than new statutes. Ghana’s approach similarly seeks to integrate non-interest banking into the existing financial, legal, and supervisory architecture, reducing legal fragmentation and regulatory arbitrage while allowing the industry to evolve organically within a secular system. This pragmatic integration, rather than obscuring Islamic finance’s heritage, aligns with international best practice and provides a viable foundation for a functional and relevant non-interest banking sector.

By Dr. Shaibu Ali, Director General of the Islamic Finance Research Institute of Ghana