In an article reacting to the Bank of Ghana’s exposure draft on Non-Interest Banking on Saturday December 13, Mr. Simons argued that the central bank’s decision to rebrand Islamic Banking as “Non-Interest Banking” is more confusing than helpful.

According to him, while the rebranding may be intended to avoid religious controversy, it fails to reflect the reality that non-interest banking is rooted almost entirely in Islamic financial principles.

He pointed out that even though the guidelines ban religious symbols and language, they still require banks to follow Islamic standards set by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).

Mr. Simons said this contradiction creates uncertainty for banks, customers, regulators, and courts, especially since Ghana does not yet have a dedicated Islamic Banking law to clearly define how such products should operate within the country’s secular legal system.

He warned that disputes involving Islamic finance contracts such as profit-sharing and partnership arrangements could be difficult for Ghanaian courts to resolve, as these concepts are drawn from Islamic jurisprudence rather than Ghanaian statutory or common law.

The IMANI Africa vice president also criticised the “window” model that allows conventional banks to offer non-interest products alongside regular interest-based banking.

He cautioned that this could lead to abuse, where banks take advantage of tax or regulatory benefits meant for non-interest banking without fully following its risk-sharing principles.

Mr. Simons further raised concerns about taxation, deposit protection, liquidity management, and capital adequacy, noting that the current draft does not adequately address how non-interest banks would operate fairly and competitively within Ghana’s existing financial and tax systems.

He also questioned provisions that prohibit non-interest banks from benefiting from late payment penalties, warning that such rules could weaken loan repayment discipline and make these banks financially vulnerable.

In his conclusion, Mr. Simons said the proposed framework risks creating a non-interest banking sector that looks impressive on paper but struggles in practice.

He urged the Bank of Ghana to be more direct and honest about introducing Islamic Banking, supported by clear laws on taxation, bonds, liquidity support, and dispute resolution.

Without these reforms, he warned, Ghana’s non-interest banking system could become ineffective and unattractive to both banks and customers.