JUST as the Northern Caucus in the House of Representatives yesterday kicked against the recent bail-out for banks pronounced sick by the Central Bank of Nigeria, the man who calls the shots at the bank has initiated plans to develop a framework for Islamic (non-interest) banking in the country. The development came as the Catholic Archbishop of Lagos, Anthony Cardinal Okogie, gave a qualified backing to foreign acquisition of Nigerian banks.

The caucus, which criticised the development yesterday in Abuja called on the CBN to immediately seek the ratification of the National Assembly, insisting that "the injection of the N400 billion without appropriation by the National Assembly is unconstitutional."

The caucus however gave support to CBN's efforts towards sanitizing the banking sector and the country's economy and calling on the apex bank to pursue the ongoing reforms to a logical conclusion.


And speaking in Kaduna yesterday, Sanusi expressed the readiness of the apex bank for the development of an Islamic bank in the country, saying that the current global financial crisis has exposed the deficiencies in the conventional banking system.

Sanusi said the current global meltdown has severely undermined and damaged the confidence in the global governance system, adding that with crisis comes opportunities.

Speaking at a Ramadan Symposium organized by the Movement for Islamic Culture and Awareness (MICA) yesterday, the Central Bank Governor said that the current financial crisis has provided scholars, lawmakers and bankers the opportunity to reassess the opportunities provided by Islamic finance.

The CBN boss who delivered a paper entitled: "Islamic solution to the global economic meltdown," noted that in recognition of the benefits of Islamic banking in a growing economy like Nigeria, the CBN initiated actions to develop a regulatory and supervisory framework for Islamic (non Interest) banking in Nigeria.

According to him, this was to create an enabling environment for attracting the multi-billion dollars global Islamic finance industry to Nigeria and to enable Nigerians benefit from sharia compliant banking services and products.

He noted that a draft policy framework towards the establishment of the Islamic financial industry in the country was issued in March 2009 and is currently being reviewed for eventual release to the industry as a final document.

Sanusi said further that in keeping with its commitment to promoting the development of Islamic banking in Nigeria, "the CBN intends to pursue the following strategies to address some of the identified challenges,

"Extensive capacity building through collaboration among the various stakeholders to develop cognate expertise in non-interest banking; development of an adequate regulatory and supervisory framework for the effective operation of non-interest banking in Nigeria.

"Promotion of greater cooperation and coordination among relevant regulators and other stakeholders such as the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), National Insurance Commission (NAICOM), Nigeria Accounting Standards Board (NASB), the Economic and Financial Crimes Commission (EFCC), Federal Inland Revenue Service (FIRS), the Federal Ministry of Finance, the National Assembly etc that may have important roles to play in the successful implementation of Islamic banking in Nigeria.

"Sensitising the general public through conferences, seminars, workshops, etc, on the benefits to be gained from Islamic finance,"

Sanusi further asserted that the prospects for the budding Islamic finance industry in the country can be seen by the growing number of investors and banks wishing to operate Islamic banking concept; recognition of the Islamic banking concept by the banks and other financial institutions Act 1991 as amended and significant Moslems and non- Moslem population majority of whom yearn for Islamic finance service.

The CBN governor noted that from the resilient nature of Islamic finance, it is quite evident that the opportunities are enormous as well as the challenges, adding that the challenges are in three fronts of theoretical, operational and implementation.

He argued that each of these challenges have profound implications for the development and the future direction of Islamic finance, adding that, "looking ahead, it is envisaged that Islamic finance will form a significant part of the Nigerian financial landscape."

Sanusi challenged organizers of the symposium to come up with workable suggestions and strategies that will assist the CBN to provide a conducive and enabling environment for Islamic finance in the country.

MrCrackles:

You are very wrong on the highlighted bit. . .
I dont think it is fair to say the Govt. is trying to Islamize the country
Instituting ethical banking into the ailing banking sector doesnt translate to a move to Islamize the country
Even if Islamic banking was introduced, i think it will be optional
Islamic Banking is pretty decent and u need to look at it's success around the world including countries like the UK

He noted that a draft policy framework towards the establishment of the Islamic financial industry in the country was issued in March 2009 and is currently being reviewed for eventual release to the industry as a final document.

PapaBrowne:

The merits of non interest banking cannot be denied. Whether we call it Islamic banking or whatever, it is okay to have such banks in Nigeria.
The problem is when you creep up with an agenda like Sanusi is doing, takeover some already built up banks and then hand them over to Islamic banks!
This is immoral and would further divide the already very fragile cacophony of a country called Nigeria.
They tried to set up Jaiz Bank a few years ago, everybody was fine with it, but the bank couldn't raise the required 25bn naira.
To now take over banks other people built up with their sweat and blood and hand them over on a platter to these Islamic banks is a slap on the face of the Islamic religion itself.

Xavier.:

"I have not read him say he was going to sell the troubled banks to Islamic banking investors. The introduction of Islamic banking is separate and has nothing to do with the the troubled five banks."

Yeah right.

Jarus:

I have not read him say he was going to sell the troubled banks to Islamic banking investors. The introduction of Islamic banking is separate and has nothing to do with the the troubled five banks.

Ibime:

Islamic banking is good for Nigeria.

It is the same as Judaist banking, so the word "Islamic" should not make nuccas panic.

I am in support of creating a 'non-interest' bank in Nigeria - a bank which is forced to invest in goods and services, not speculative loans which have no impact on the economy.

Islamic banking is good for a developing economy which does not have the strength to go through boom and bust cycles.

I already discussed the merits in another post but the moderator deleted it. I cant be bothered to go over the same points again.