Scholars support introduction of non-interest banking

Some university lecturers have spoken in support of the introduction of Islamic (non-interest) banking in Nigeria by the Central Bank of Nigeria.

Controversy had trailed an announcement by the CBN governor, Sanusi Lamido, that the CBN will soon licence operators of the scheme. While some Nigerians are in support of it, others are vehemently against it, saying it is an attempt to turn Nigeria into an Islamic state.

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However, two finance lecturers at the faculty of business administration, University of Lagos, spoke in support of the system.

Tajudeen Yusuf, who argued that the Bank and Other financial Institutions (BOFIA) Act of 1991 is in support of non-interest banking, said there was no basis for the condemnation of what the CBN is doing.

“Everybody knows the effects of interest in our lives these days. It is affecting our economy; so, (Islamic bank) is a way by which we can be free from poverty. It is viable and accepted by countries across in the world,” Mr Yusuf said.

Okwy Okpala, in his own submission, said he thinks it would be good for the economy as both the bank and its customers share profit and loss, although most of time, there is no loss. He said the traditional banking system is a case of, ‘I lend you money and charge you 10% interest on it. Whether you make profit or loss, I don’t care.’

He, however, said, the problem a number of people have with the non-interest banking is the word, ‘Islam’, that was used by the governor to describe it.

“It is just like people misunderstand Shariah,” he said. “They believe Shariah is all about cutting off the hands. The problem is there because they don’t read about it. They think Islamic banking is about forcing somebody into a narrow Islamic world.”

Mr Yusuf agrees with this. He said he identified three reasons for the suspicions of the critics of the banking system, one of which he said is Islamaphobia (hatred for Islam).

“Some people hate to hear anything about Islam. Whenever any issue is raised about Islam, they oppose it without bothering to know what it entails,” he said.

He listed the second reason as ignorance, saying some people have no knowledge of what the Islamic banking is all about; and lastly, that some people are thinking it will affect the religious balance in the country.

“The idea of non-interest banking was conceived during the reign of the former governor, Charles Soludo, and Mr Sanusi continued from where he stopped because governance is a continuous effort,” Mr Yusuf said.

“But some people think it would polarize the country. Should we say that the United States is unaware of what non-interest banking can do? What about the United Kingdom, Luxembourg, Kenya, Uganda, and even South Africa? How many countries have been Islamised through non-interest banking? We should allow it to work,” he appeals.

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