KALYANGO KEITH STEVEN 221-053012-21223

ABSTRACT
A financial system based on Sharia law is known as Islamic financial and Finance.
The Financial Institutions (Amendment) Act of 2016, which included specific
provisions permitting the establishment of Islamic Banking and Finance, wherein
financial institutions are allowed to offer Shaira law banking system in addition to
their conventional banking services, is credited with introducing the concept to
the Ugandan banking system. The regulatory framework for Islamic banking and
finance is examined, along with any potential ramifications that may occur when
it is operationalized. The origins of the banking and finance system may be traced
back to the Koran and the teachings of Islamic scholars, who emphasized that
participants to a transaction in the banking and finance system should
concentrate on what is allowed and legal under Sharia law. It also examines the
manner in which Financial Institutions must function in compliance with the
limitations imposed by the central bank and shariah principles. A key source of
knowledge on Islamic banking and finance is the Financial Institutions (Islamic
Banking) Regulations of 2018, with additional secondary sources of information
taken into consideration.The results show how Islamic finance and banking are
likely to clash with other current legal frameworks. This may thus have an impact
on how Islamic finance and banking function. A sensible change to current
regulations that are probably incompatible with Islamic banking and finance is the
main advice to ensure good Islamic banking and finance in Uganda.