Quote: "One of the SANs, who disclosed that the matter would be filed “any moment from now”, said: “We know that it is the right of the CBN to regulate the banking sector, but with this new guideline, what they have simply done is to shut out Buddhists, Animists, Atheists, Christians and others from Non-Interest Financial Institution business by saying you must be Sharia-compliant before you can engage in this type of business or to get licence. Nobody is against Islamic Banking or Muslims but what we are saying is that you can’t tell me to be Sharia-compliant to engage in this business in a secular state. There is Islamic banking in Europe and other places, but you can’t find it in their laws that you must be Sharia-compliant
. . .
They added: “Unconstitutional exclusion of non-Muslims from non-interest banking by insisting that Non-Interest Banking products must be Shariah compliant, the CBN has unjustly excluded non-Muslim Nigerians from the emerging Non-Interest Banking business sub-sector, contrary to Section 16 1(d) of the 1999 Constitution (as amended), which states that “without prejudice to the right of any person to participate in areas of the economy within the major sector of the economy, protect the right of every citizen to engage in any economic activities outside the major sectors of the economy. By the proposed plan to establish the CBN Shariah Council, which would obviously comprise only Muslims, the CBN would be contravening the Federal Character Principle entrenched in Section 14(3), which states that ‘The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty, thereby ensuring that there shall be no predominance of persons from a few states or from a few ethnic or other sectional groups in that government or in any of its agencies."

What does Sharia-compliant really mean

I wonder why it is so hard for some people to understand that Nigeria is a secular state. Religion and politics tend to bend the mind of people who are otherwise reasonable folks, and that is the case here.

But this is really not about religion - it is another creeping hand of the oligarchy to control without "interest" more of Nigeria's resources. They have either found a willing "believer" that thinks he is serving religion in Sanusi or he is proving that he is a member of that group. We'll find out that most of the funds going into this "interestless" business would be "secular" Nigeria's money!!!

Sanusi has done enough at the CBN. Now he is just going too far!!!

Monday, 23 May 2011 00:00 Segun Adeleye Hits: 5 .

A MAJOR legal battle in the banking sector is on the way, no thanks to the new guideline on Non-Interest Financial Institutions (NIFI) by the Central Bank of Nigeria (CBN).

The guideline, which became operational on January 13, 2011, and signed by the Acting Director, Financial Policy and Regulation Department of the apex bank, Chris.O. Chukwu, introduced religion into Nigerian banking, contrary to the Banks and Other Financial Institutions Act 1991 (as amended).

Already, four Senior Advocates of Nigeria (SAN) have been engaged by some Nigerians to fight the new guideline at the Federal High Court, Abuja.

One of the SANs, who disclosed that the matter would be filed “any moment from now”, said: “We know that it is the right of the CBN to regulate the banking sector, but with this new guideline, what they have simply done is to shut out Buddhists, Animists, Atheists, Christians and others from Non-Interest Financial Institution business by saying you must be Sharia-compliant before you can engage in this type of business or to get licence.

“Nobody is against Islamic Banking or Muslims but what we are saying is that you can’t tell me to be Sharia-compliant to engage in this business in a secular state. There is Islamic banking in Europe and other places, but you can’t find it in their laws that you must be Sharia-compliant”.

Chukwu’s letter reads: “Further to our circular reference No. BSD/Dir/Gen/NIB/01/008 dated March 4, 2009 on the above subject and following extensive consultation and receipt of comments/inputs by stakeholders, the Central Bank of Nigeria hereby releases the Framework for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria, as well as the following supporting guidelines:

•Guidelines on Shariah Governance for Non-Interest Financial Institutions in Nigeria; and

•Guidelines on Non-Interest Window and Branch Operations of Conventional Banks and Other Financial Institutions

“All enquiries should be forwarded to the Ag. Director, Financial Policy and

Regulation Department, Central Bank of Nigeria, Central Business District, Abuja.”

To opponents of this guideline, Section 61 of the Banks and Other Financial Institutions Act (BOFIA) of 1991 (BOFIA) has already defined a Non-Interest Bank in Nigeria as a “Profit and Loss Sharing Bank”. That is, “a bank which transacts investment or commercial banking business and maintains profit and loss sharing accounts”.

So, the CBN has, through the framework, ‘illegally’ re-defined a Non-Interest Financial Institution as a bank or Other Financial Institution, which transacts banking business “in accordance with Shariah principles and rules of Islamic commercial jurisprudence”.

The stakeholders, in a letter circulated at the weekend, said that the new guidelines “also introduced religion into the Nigerian banking, contrary to the spirit and letter of BOFIA.

Section 39 (1) of the BOFIA stipulates that “Except with the written consent of the Governor (a) no bank shall, as from the commencement of this Decree, be registered or incorporated with a name, which includes the words “Central” “Federal,” “Federation,” “National”, “Nigeria”, “Reserve”, “State”, Christian”, “Islamic”, “Moslem”, “Quaranic”, “Biblical”.

They added: “Unconstitutional exclusion of non-Muslims from non-interest banking by insisting that Non-Interest Banking products must be Shariah compliant, the CBN has unjustly excluded non-Muslim Nigerians from the emerging Non-Interest Banking business sub-sector, contrary to Section 16 1(d) of the 1999 Constitution (as amended), which states that “without prejudice to the right of any person to participate in areas of the economy within the major sector of the economy, protect the right of every citizen to engage in any economic activities outside the major sectors of the economy.

“By the proposed plan to establish the CBN Shariah Council, which would obviously comprise only Muslims, the CBN would be contravening the Federal Character Principle entrenched in Section 14(3), which states that ‘The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty, thereby ensuring that there shall be no predominance of persons from a few states or from a few ethnic or other sectional groups in that government or in any of its agencies’.

“Contravening the secularity of Nigeria enshrined in Section 10 of the Constitution of the Federal Republic of Nigeria, which states that ‘The Government of the Federation or of a State shall not adopt any religion as State Religion’; Contravening the constitutionally-guaranteed freedom of religion as stated in Section 38 (1) that “every person shall be entitled to freedom of thought, conscience and religion’.

Below are the highlights of CBN’s framework for Non-Interest Financial Institutions:

DEFINITION OF NIFI: “A Non-Interest Financial Institution (NIFI) means a bank or Other Financial Institution (OFI) under the purview of the Central Bank of Nigeria (CBN), which transacts banking business, engages in trading, investment and commercial activities as well as the provision of financial products and services in accordance with Shariah principles and rules of Islamic commercial jurisprudence.”

The Glossary of Terms of the CBN’s NIFI Framework states that:

Shariah Principles refer to “the divine guidance as given by the Holy Qur’an and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”.

NON-PERMISSIBLE TRANSACTIONS:

Interest;

•Uncertainty or ambiguity relating to the subject matter, terms or conditions;

•Gambling;

•Speculation;

•Unjust enrichment;

•Exploitation/unfair trade practices;

•Dealings in pork, alcohol, arms & ammunition, indecency and;

•Other transactions, products, goods or services, which are not compliant with Shariah rules and principles.

•LICENSING PRE-CONDITIONS:

•Evidence of a technical agreement executed by the promoters of the NIFI with an “established and reputable non-interest bank or financial institution”. This, in practical terms, implies compulsory partnership with an existing Islamic bank.

•NIFI’s Memorandum and Articles of Association (MEMART) to state that its business operations will be conducted in accordance with Shariah principles and practices.

•ELIGIBLE TRANSACTIONS:

•Murabahah: Sale of an asset by the financial institution to a customer at cost plus a profit margin.

•Mudarabah: A profit sharing contract where one party contributes his entrepreneurial efforts, while the other provides capital.

•Musharakah: A partnership contract between two or more parties, each contributing capital.

•Ijarah: Lease transaction.

•Salam: Forward sale contract.

•Istisna: Manufacture/construction order contract for manufacture of goods and commodities allowing cash payment in advance and future delivery according to specifications given in the contract agreement.

•Wadia: An amount deposited whereby the depositor is guaranteed his/her fund in full.

•Wakalah: Agency agreement assigning management of funds to a manager for fees.

•Sukuk: Certificates of equal value representing undivided share in ownership of tangible assets.

•Any other financing mode or structure that is Shariah-compliant and approved by the CBN.

CORPORATE GOVERNANCE:

•All licensed NIFIs are to have an internal Shariah compliance review mechanism and a Shariah Advisory Committee (SAC) as part of their governance structure.

ESTABLISHMENT OF CBN SHARIAH COUNCIL:

An advisory body on non-interest banking and financial services to be established at the CBN to be called the CBN Shariah Council (CSC), which is to advise the CBN on Shariah matters for the effective regulation and supervision of NIFIs in Nigeria.

•BRANDING: NIFIs shall not include the word “Islamic” as part of their registered or licensed names. They shall, however, be recognised by a uniform symbol designed by the CBN.

•AUDIT, ACCOUNTING AND DISCLOSURE REQUIREMENTS: NIFIs are required to comply with the relevant standards on disclosure issued by standards setting organisations, including the following:

•Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI);

•Islamic Financial Services Board (IFSB); and

•Nigerian Accounting Standards Board (NASB).

All NIFIs are required to carry out an internal Shariah audit on a periodic basis to examine and evaluate the extent of compliance with Shariah rules.

•LIQUIDITY MANAGEMENT:

•Liquid assets shall be held in line with the provision of section 15 of BOFIA 1991 provided they are Shariah-compliant.

•NIFIs shall not invest their funds in interest-bearing securities or activities. They are required to invest their funds in eligible Shariah-compliant instruments for the purpose of meeting the CBN prescribed minimum liquidity ratio.

•RISK MANAGEMENT:

NIFIs are to comply with the Islamic Financial Services Board’s Guiding Principles of Risk Management for Institutions Offering Only Islamic Financial Services.

http://www.compassnewspaper.com/index.php?option=com_content&view=article&id=6696:row-over-cbn-sharia-clause-in-banking-rule&catid=308:headlines&Itemid=600

Get rid of all of these goddamn . . . in government. Useless idiots.

Sanusi must go. Sack him and replace him and other Shariaists in government with competent secular men.

CBN Sharia council. Lmao.

In a supposedly secular state?

Is the only way to implement a no-interest bank through Sharia?

You can offer the product without introducing religion into the mix.

I've always suspected this Sanusi guy. How did he end up with this job, given his large # of bigoted writings on gamji.com?

I have never seen a leader that is so bigoted as Sanusi,
How come He's handling a national ans sensitive institution like the CBN and not the National Hajj whatever,

^^^
What do you expect from a CBN governor whose only postgraduate degree was in Islamic studies

GEJs first order of business needs to be to sack him and replace him with Soludo, Okonjo-Iweala, Aganga, people of that caliber.

1) CBN Sharia council
2) CBN Hotel
3) Dumb cash policy

Three blunders in a fairly short period of time. How many more will we find if we look more deeply?

ekt_bear:

GEJs first order of business needs to be to sack him and replace him with Soludo, Okonjo-Iweala, Aganga, people of that caliber.

1) CBN Sharia council
2) CBN Hotel
3) Dumb cash policy

Three blunders in a fairly short period of time. How many more will we find if we look more deeply?

Okonjo-Iweala would be a popular choice. We can't risk a Soludo as CBN governor anymore. Maybe as Finance minister but Aganga seems to have done well in GEJ's eyes. Soludo should try as the special adviser.

Sanusi is an avid sharia supporter. Why do muslims have you hammer this Islam gimmick in your face 24/7?

These SANs are hypocrites, Islamic banking started under Joseph Sanusi, was also championed by Soludo, now that Sanusi is ready to implement it they are making noise, let them go to the courts, I am very sure they are being instigated by people like ibru and Akingbola, dem dey craze, let christians demand Christian banks, let buddhists demand buddhists banks, bunch of no gooders.

^--
How about everything just remain secular?

I don't have a problem with no-interest banking (which I guess is the intent of Islamic banking.)

But implement it in a secular way.

You really don't have a problem with the idea of a CBN Sharia court?

When did this become the Islamic Republic of Nigeria

What's this craze over islamic banking in Nigeria. Is it now the most profitable banking business, though no interest is charged

sanusi has just written his sack letter ~ trust GEJ.

Vintage erratic Sanusi,blowing hot and cold
The man is too bigoted to man a postition as senitive as that of a CBN governor,since he's so keen on implementing sharia everywhere he turns,then he should resign or BE SACKED from that post and either go and become a muslim cleric or join Buhari in CPC

[size=15pt]CALCULATED WELL-ARTICULATED AND ORCHESTRATED PLOT TO UPROOT SANUSI
NO THANKS TO HIS FEARLESS FACE-OFF WITH THE LEGISLATORS WHICH COST MOST OF THEM A RETURN TICKET[/size]
Fools base their judgements purely on the pages of newspapers and sponsored articles

people,

if we put the issues into perspective and separate them. NIFI is a good financial concept but tilting it in the direction of religion is not wholesome. that said, i dont think this is a good enough reason for Sanusi to be removed.

the man has done well despite our personal views on his handling of the rot in the banking sector, truth be told, the bank was in a terrible state and would have fu-ked everybody up if the guy had not taken the hard stance he took back in '09

enyojo:

CALCULATED WELL-ARTICULATED AND ORCHESTRATED PLOT TO UPROOT SANUSI
NO THANKS TO HIS FEARLESS FACE-OFF WITH THE LEGISLATORS WHICH COST MOST OF THEM A RETURN TICKET
Fools base their judgements purely on the pages of newspapers and sponsored articles

And what did you base the above on? Indepth analaysis of the issues or teh emotional disconnect with legislators and therefore they must be responsible for Sanusi making such a blunder! 

NIFI is in itself not a problem, the issue with it is the tag of religion that it bears and unfortunatley, Nigeria is a circular state and the current enbaling law clearly forbids such. If he gets the BOFIA amended then there is no issue, but as of NOW, the NIFI as spelt out contravenes the national act.

[b]the man has done [/b]well despite our personal views on his handling of the rot in the banking sector, truth be told, the bank was in a terrible state and would have fu-ked everybody up if the guy had not taken the hard stance he took back in '09

What exactly has sanusi done except his noise making and bigoted policies?

[b]NIFI or any non-interest financial system can be embraced and patronized by anyone that desires so: Muslims or Non-Muslims. Islamic banks exist in Western countries (including the all secular UK) more secular than Nigeria:http://www.islamic-bank.com/

Even in the USA, the federal reserve advocates a near-zero interest rate always. Making the present Fed Chairman, Bernanke, to keep having a growing list of critics especially among the academicians (including one of my professors here in California). Some economists have always argue that high interest is a like a poison to an economy.

Lamido's only mistake was to narrow the only type of interest-free system in Nigeria to the Islamic Banking system. Of-course in any country where Islamic banks occur, they are regulated by a central bank's unit filled with specially trained specialists.

Because of Nigeria's peculiarity (with its deep islamaphobia) however, the CBN ought to make provision for the licensing of other secular non-interest based financial institutions  if the market demand for it.

Statistically  though, the most popular interest-free banks all over the world have always been owned and run by the Muslims.[/b]

That sanusi guy is going too fast and should be cautioned and forced to rescind dat decision, if refuses, he should be sacked.

Islamic banking has to be Sharia compliant. So, it is now that the Central Bank of Nigeria wants to implement Islamic banking that these SANS realize that there is something called Interest-free banking, where were they before? You will shout till you tire but the policy will remain in-place.

Islamic banking has to be Sharia compliant. So, it is now that the Central Bank of Nigeria wants to implement Islamic banking that these SANS realize that there is something called Interest-free banking, where were they before? You will shout till you tire but the policy will remain in-place.

you are not making sense

@ekt

The Islamic banking thing was introduced by a Christian when he was the CBN governor, if muslims or other group of people want to bank with a Sharia bank, that is their wahala, I am not religious myself, but, I will not advocate stopping people from owning businesses that cater to the needs of their religion, why do we not have this outcry with religious institutions like schools, most of the private higher institutions are christian and they insist on christian principles and doctrines (attendance of church activities compulsory) thereby alienating people of other religions, we need to learn tolerance in this country, when the Sharia bank opens, I will look at the integrity of those behind and make my decision whether to bank with them or not, what is paramount is that my money is safe and they work with me to grow my business, I care not if they worship Ogun, Sango, Allah or Jesus, that is their wahala.

dat muderfu-cker sanusi want 2 draw 9ja backwards with his stu-pid islmaic belief.
But GOD will not allow dat.

chamber2:

you are not making sense

Does this make sense to you?

hercules07:

@ekt

The Islamic banking thing was introduced by a Christian when he was the CBN governor, if muslims or other group of people want to bank with a Sharia bank, that is their wahala, I am not religious myself, but, I will not advocate stopping people from owning businesses that cater to the needs of their religion, why do we not have this outcry with religious institutions like schools, most of the private higher institutions are christian and they insist on christian principles and doctrines (attendance of church activities compulsory) thereby alienating people of other religions, we need to learn tolerance in this country, when the Sharia bank opens, I will look at the integrity of those behind and make my decision whether to bank with them or not, what is paramount is that my money is safe and they work with me to grow my business, I care not if they worship Ogun, Sango, Allah or Jesus, that is their wahala.

If it doesn't, sorry I can't help you.

@hercules07: There is no reason to mix up religion and banking, is my point. Banking is regulated by the government. If you mix religion into it, then that means that the government has to dabble in religion, too.

Basically, you can get 99% of the benefits of Sharia banking w/o introducing religion into the mix.

Doesn't the concept of a  CBN sharia council bother you?

Seems like a clear violation of the concept of separation of "church" and state, no?

We Nigerians are the worst religious bigots and hatersin the world.

Islamic Banking is based on islamic principles which is not just inteterest free but other islamic financial transaction which can only be explianed and regulated by islamic finance experts. About 3 to 4 universities in the UK offer masters in ISLAMIC FINANCE and it is a wide field.

The fact that there is no such thing as christian finance or Bhuddist finance in academic discourse should not be a reason to hate islam for such. In the UK, we have islamic bank of Britain who have a SHARIAH COMPLIANCE ADVISORY COUNCIL comprising of islamic scholars well versed in financial issues. HSBC, LLoyds TSB both have Shariah Advisory COuncils. The is a Semi Christian or secular state and we have no fuss about it.

This propagamda is just being peddled by the Ibrus, Atuches of this world who are bent on destroying Sanusi who is respected in the whole world and celeberated worldwide for his good work.

The earlier we shed our bigotry and islamophobia the better for us as a nation.

Lagosboy:

We Nigerians are the worst religious bigots and hatersin the world.

Islamic Banking is based on islamic principles which is not just inteterest free but other islamic financial transaction which can only be explianed and regulated by islamic finance experts. About 3 to 4 universities in the UK offer masters in ISLAMIC FINANCE and it is a wide field.

The fact that there is no such thing as christian finance or Bhuddist finance in academic discourse should not be a reason to hate islam for such. In the UK, we have islamic bank of Britain who have a SHARIAH COMPLIANCE ADVISORY COUNCIL comprising of islamic scholars well versed in financial issues. HSBC, LLoyds TSB both have Shariah Advisory COuncils. The is a Semi Christian or secular state and we have no fuss about it.

This propagamda is just being peddled by the Ibrus, Atuches of this world who are bent on destroying Sanusi who is respected in the whole world and celeberated worldwide for his good work.

The earlier we shed our bigotry and islamophobia the better for us as a nation.

Yes sir!

i think sanusi has tried and we thank him of a job welldone, let him take a bow and go. GEJ ues the hammer if he refuses.

@ekt

Why is it that it is in banking that religion should not be introduced, why not education, is education not regulated by government, are the institutions not even asking for bailout from government, I hope you are aware that in the days of Ibru and Akingbola, they used to hold morning devotion at work? As I said, I am not that religious, but, if adherents of a religion decide that that is the way they want to go and the laws are not being broken, they can go right ahead, it does not infringe on my rights.
GEJ can not sack Sanusi, it is the House that has the power, the thing that I like about Sanusi is that he is not afraid to resign or be sacked. We complain about non implementation of policies, Sanusi is implementing CBN policies we are up in arms.

Lagosboy:

We Nigerians are the worst religious bigots and hatersin the world.

Islamic Banking is based on islamic principles which is not just inteterest free but other islamic financial transaction which can only be explianed and regulated by islamic finance experts. About 3 to 4 universities in the UK offer masters in ISLAMIC FINANCE and it is a wide field.

The fact that there is no such thing as christian finance or Bhuddist finance in academic discourse should not be a reason to hate islam for such. In the UK, we have islamic bank of Britain who have a SHARIAH COMPLIANCE ADVISORY COUNCIL comprising of islamic scholars well versed in financial issues. HSBC, LLoyds TSB both have Shariah Advisory COuncils. The is a Semi Christian or secular state and we have no fuss about it.

This propagamda is just being peddled by the Ibrus, Atuches of this world who are bent on destroying Sanusi who is respected in the whole world and celeberated worldwide for his good work.

The earlier we shed our bigotry and islamophobia the better for us as a nation.

Sorry but i have to say that your write up is the biggest pile of c.rap i have ever read. Is it really so difficult to get it in your head that Nigeria is a secular state and that in no circumstance should anything religious define the runnings of the government affairs. Religion does not belong in government!!! get it? Nigeria is not Britain, so desist from comparing UK to Nigeria. Since muslims in the UK are measly 3 million in population, they pose absolutely no threat to the UK since they can easily be crushed should they attempt any islamic revolution, so allowing them to operate small scale islamic banking would mean little and also gives them the impression that they are welcomed in the UK.

Nigeria on the other hand has a large islamic population and any penetration of their islamism into the affairs of goverment would be viewed with sceptism and fear of islamic domination would set in since other religion are not getting the same treatment. Thus therefore Nigeria remains a strictly secular state and your silly islamic banking nonsense has no place in anything fedetral especially CBN. If you want to enact such laws, go to your islamic states and do that and not with laws that affect all Nigerians.

We also know how radical nigerian muslims are and the extent of what they can do is not in doubt and therefore they should be strictly monitored.

Steal money from inflated Govt contracts or from Govt coffers or from monopoly in some products like cement, salt etc. Partake in tax money collected from alcohol dealers, gambling companies; then take the money to interest free Sharia banking and Allah will forgive you for embezzlement of public funds or crudely acquired wealth.
kai! walahi I dey confuse for all this