There will be no more Islamic banks in southern Sudan. According to the southern Sudan cabinet’s interpretation of Sudan’s Comprehensive Peace Agreement (CPA), Islamic banks in south Sudan must either convert to conventional systems or cease operations.
Othom Rago Ajak, director of banking at the Bank of South Sudan, was adamant: “If you are a bank and you want to operate in southern Sudan, you have to charge interest rates. Any person depositing money here, you have to pay interest on his money.”
The CPA states that the north of Sudan will domicile Islamic banks, in parallel with the Islamic system in the primarily Muslim north and the south will host conventional banks.
There are currently four Islamic banks in operation in the south; these are the Omdurman National Bank, Bank of Khartoum, Faisal Islamic Bank and the Farmers Bank. They have all indicated that they will withdraw from the south of Sudan.