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Thursday, July 14, 2011

Nigeria: Central Bank Issues Additional Guidelines on Non-Interest Banking

The Central Bank of Nigeria (CBN) has said it would re-issue guidelines on non interest banking to accommodate other variants following public outcry against its earlier categorization of that segment of the banking system. In its earlier guideline, the regulator defined non interest banking as only that which is Shariah compliant, prompting antagonism that such was capable of marginalizing other firms that may want to practice non interest banking without compliance to Islamic jurisprudence.

"This revised guideline includes an amendment in the interpretation of non-interest banking to the extent that the previous guideline could have been interpreted as defining non-interest banking as solely Islamic banking," stated a circular signed by Chris Chukwu, acting director, financial policy and regulatory department of the CBN. "The CBN wishes to clarify that Islamic banking is not the only type of non-interest banking contemplated under the new banking model which categorized non-interest banks as part of specialized institutions. The CBN recognizes that Islamic banking is a form of non-interest banking and that there are other forms of non-interest banking than Islamic banking."

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