The Governor of the CBN, Mr. Lamido Sanusi, also disclosed that it was considering
more after the jump
a request from Standard Chartered Bank to undertake Islamic banking.
Sanusi said with the award of the licence, Stanbic IBTC is expected to commence Islamic banking within six months, failure of which the licence becomes void, requiring that the bank reapply to the CBN for similar licence.
Also speaking in an interview in South Africa, CBN Deputy Governor, Mr Kingsley Moghalu, noted that the licence, the first to be issued to any bank in Nigeria, would give the bank the opportunity to participate in the Sharia-compliant banking window, which forbids paying and receiving interest on loans, enabling the bank to churn out Islamic banking products.
Islamic banking also requires that profits or losses are shared with the borrower, which discourages unnecessary speculation and spread risk.
He said: “We know a number of other banks are interested in applying for non-interest banking windows. We are preparing our officials to be able to regulate that space, and a lot of training is taking place in that context.
On the religious implication of Islamic banking, Moghalu said: “This is a financial product. It has got nothing to do with religion.”
Sanusi had informed the financial community earlier in the year that government was committed to establishing Nigeria as the African hub for Islamic banking.
In related news Sanusi also revealed on Monday that a group had earlier in the 1990s, applied for licence to establish an Al Qaeda Bank in the country but was not approved.
The CBN chief who disclosed this at the opening of an international conference on Islamic Banking in Abuja, said that the group’s application was turned down for failing to meet requirements for banking licence.
Another group that applied for licence to establish another Islamic Al Barka Bank, was equally turned down, Mallam Sanusi said.
His words, “in the early 1990s two applications were received and processed for Islamic banking licence: Al Barka Bank and Al Qaeda Bank. However, those two banks could not meet the requirement for the grant of a final licence”.
But the governor insisted that he would pursue the current move for the establishment of Islamic banks in the country unless stopped by a law court, as according to him, the history of Islamic banking dated back to 1991.
“The history of Islamic Banking in Nigeria dates back to 1991 with the promulgation of BOFIA, Banking and Other Financial Institutions Act which provided the legal guidelines for the regulation of non-interest of profit/loss sharing banking in the country”, he said.
Mallam Sanusi added that by 1996, the then Habib Bank sought and obtained CBN approval to operate Islamic banking model.
Also Jaiz, a company that has been promoting Islamic banking in Nigeria, “got an approval in principle in 2004 but could not take off due to lack of capital”.
He said that the CBN under his administration was not promoting Islamic banking but only doing its duties of providing necessary guidelines to ensure adequate regulation for its operations.
His words, “we have the responsibility to continue to explain that the CBN is neither promoting nor establishing an Islamic bank. The CBN is licensing and regulating Islamic banking and that is under the law”.
Mallam Sanusi said critics of Islamic banking were politicizing the issue based on religion rather than looking at it from the economic perspective.
“I think it is because of Nigerian politics- highly divided, highly sectarian. I think we are in the habit of using every opportunity to exploit religion or ethnic difference for political ends”, he said.
Source....Vanguard
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