Nigeria- Stanbic Wins Approval for Islamic Banking

Central Bank of Nigeria (CBN) Governor, Mallam Sanusi Lamido Sanusi yesterday said that Standard Bank of Nigeria has secured approval to set up an Islamic banking arm.

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Daily Champion recalled that the CBN governor had in the month of March 2011 said that he wanted to establish Nigeria as the African hub for Islamic banking and was working on a regulatory framework to emulate the success of the industry in Malaysia.

He said Stanbic IBTC Bank had six months to comply with the approval terms.

Islamic banking products, which are Sharia compliant, do not charge interest on financing. Profits or losses are instead shared with the borrower, meaning they discourage unnecessary speculation and spread risk.

Sanusi has said he was looking at Islamic finance as a way of diversifying the country’s financial system and was planning to issue the first sovereign sukuk within the next 18 months.

Daily Champion recalled that the CBN boss had Sanusi Lamido Sanusi has challenged critics of the proposed Islamic banking to go to court to seek the interpretation of law which empowers the CBN to establish such a bank.

Speaking weekend in Kano at the Kofar Mata Mosque during a lecture organized by Tijjaniya Youth Enlightenment on the rudiments of Islamic banking, Sanusi had said it was only the court that can determine whether the proposed bank is against the constitution of Nigeria, adding that if the court gives a judgment that is not favourble to the CBN, he is ready to abide by it.

Sanusi explained that all the steps taken by the CBN to establish the first Islamic bank in Nigeria are within the confines of the law of the country.

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He promised to offer explanation to anybody that has a grudge over the issue, stressing that it is the country’s law that authorized the CBN to do that.

Sanusi, who addressed the mullahs in his native dialect Hausa, further stressed that the current leadership of CBN is building on the achievement of Charles Soludo who started the process during his tenure as CBN Governor in 2006.

He said the issue of Islamic Banking has a root in the constitution and one has to amend the constitution to expunge that aspect that empowers the CBN to establish a non-interest bank.

“The whole concept of Islamic Banking System was introduced in the country through Banks and other Financial Institution act of 1991 that allows the operations of Non Interest Banking services in Nigeria,” he said.

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