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Court Declares Islamic Bank Illegal

16 Jun 2012

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CBN Governor Sanusi Lamido Sanusi

... Refuses to nullify Jaiz International Bank's licence

By Tobi Soniyi in  Abuja

A Federal High Court in Abuja yesterday declared the non-interest financial institution operating under the principles of Islamic jurisprudence as illegal and unconstitutional.


Justice Gabriel Kolawole held that had it not been that the plaintiff, Godwin Sunday Ogboji lacked the locus standi to institute the action, he would have nullified the licence issued to Jaiz International Bank PLC to carry out Islamic banking in the country.


He said: “There are no provisions in the CBN Act and the Banks provided for in the Banks and other financial Institutions Act (BOFIA) that empowers the CBN Governor Sanusi Lamido Sanusi to issue license for non-interest financial institution to operate under the principles of Islamic jurisprudence without the approval of the head of state through the minister of finance.


‘’Unlike the other specialized banks, the Jaiz International Bank PLC can only be established in the country with the intervention of the National Assembly by amending the BOFIA Act.


‘’If not that the plaintiff has no locus standi to maintain this action, I would have nullified the illegal license issued to the Jaiz International Bank PLC by the CBN to operate non-interest banking under the principles of Islamic jurisprudence.


‘’This case is hereby struck out for lack of locus standi, but the AGF should take steps to remedy the situation, and further ensure that the CBN  carries out its duties within the provisions of the law establishing it’’.


Ogboji, a legal practitioner asked the court to hold that the CBN’s guidelines for the regulation and supervision of institution offering non-interest financial services in Nigeria under Islamic commercial jurisprudence is ultra vires, illegal, null and void.


But the CBN and its governor had asked the court to dismiss the suit on the grounds that the plaintiff had failed to disclose how the license and issuance of the guidelines had adversely affected him.


He cited Section 10 of the constitution which says government should not adopt any religion.


‘’CBN does not have the power to designate Islamic Bank as specialize bank’’, Justice Kolawole held.

Tags: CBN, Featured, News, Nigeria, Sanusi Lamido Sanusi

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  • what do you expect?

    From: mosas

    Posted: 2 years ago

    Flag as inappropriate

  • monkey! even England has islamic banks. who gives a rass... if you no put money inside the bank wetin concern you?

    From: yeyedeysmell

    Posted: 2 years ago

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  • Medosome interloper, a mere busy body!

    From: Yuunus Abu

    Posted: 2 years ago

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  • I hope the AGF will take advantage of the court ruling to shorten his leash on our errant CBN governor

    From: Dr. Austin

    Posted: 2 years ago

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  • Since it was not compulsory to any one,and not injuriouse to the economic development. Look @ the immense advantages to the needy and the well wishers (patrons) or why is some people are highly desperate to extent of not assisting the needy or hatered to other religion,under the pretends of bogouse law ?

    From: Adebayo Sulaiman

    Posted: 2 years ago

    Flag as inappropriate

  • if the christians have hospitals and university everywhere in the country i don't see any reasons why the muslims should not have their bank if that's what they want. Stop over heating the polity and causing unnecessary tension in the country

    From: don

    Posted: 2 years ago

    Flag as inappropriate

  • I will not expect anything less from The nigerian judiciary.a man who steals bread go to jail while the criminals who steals billions of public funds walks freely.the judiciary the most corrupt system in nigeria.it takes people like salami to do the right.i remember when 5 sans where defending one person while people perish in jail awaiting trials.

    From: harry

    Posted: 2 years ago

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  • If the plaintiff lacks standing, the case has public interest standing and therefore must be nullified.

    From: nwatah.com

    Posted: 2 years ago

    Flag as inappropriate

  • THANK YOU COURT FOR SENDING THE MESSAGE TO THE GOVERNOR OF CBN THAT ACTION IS CONTRARY TO OUR CONSTITUTION. THE GOVERNOR COULD BE A SYMPATYSER FOR BK. SOME PEOPLE LIKE TO FORCE THEIR PHILOSOPHICAL VIEW ON THE REST OF NIGERIANS, WE PEOPLE OF THE SOUTH DO PREFER DIALOGUE AND COMPROMISE ON ISSUES AFFECTING OUR NATION.

    THIS COURT DECISION WILL SEND MESSAGE TO FUTURE OFFICE HOLDERS. THERE SHOULD BE NO REPUBLIC INSIDE REPUBLIC.

    From: FEMI AJETUNMOBI USA

    Posted: 2 years ago

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  • Well now, this judgment is a step forward, it has sent the message to the appropriate quarters. I see the "jaiz bank" crash landing.

    From: Edwin

    Posted: 2 years ago

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  • Islamic Banking is one of the parameters of the Anti-Christ and a representative of 666.
    We perish for lack of knowledge.

    From: Echerow eke

    Posted: 2 years ago

    Flag as inappropriate

  • CAN, please take note. Or are you waiting for a presidential directive to know that you have locus standi? Or are you waiting for PDP to compel CBN to do the right thing?

    From: Bantu Tanko

    Posted: 2 years ago

    Flag as inappropriate

  • Should everything be defined according to religion? What kind of stupid country is this?

    From: Uche

    Posted: 2 years ago

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  • Hello My Lord. It is your judgment that we want and not your opinion. You already said he has no locus standi and you struck out the case. Of what use is your opinion thereafter. If you want to express your opinion, please take a column in the newspaper or buy time on the television and stop taking advantage of your judicial position.

    From: Safari man

    Posted: 2 years ago

    Flag as inappropriate

  • I BELIEVE THAT WE NIGERIANS CAN NEVER EVER MOVE ANY WHERE FURTHER. B/C OF HIGH RATE OF FOCUS.

    From: ISMAIL

    Posted: 2 years ago

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  • Tell the CBN gov. to learn how to follow due process in carrying out a sensitive assignment like this. He is too biased and arrogant. He is not fit to hold a public office of this nature bcos of his religious leaning and narrow mindedness.

    From: Ayodele

    Posted: 2 years ago

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  • The action of the CBN Governor who from all indication is a partisan politician driving the secret machinery of Northern agenda,is wrong,and the AGF should use this opportunity to initiate action to scrap that Jaiz bank.

    From: Ikye

    Posted: 2 years ago

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  • See u double stupid!! Islamic banking must be established in nig. And mind it is not during sunusi d licience issued to jaiz bank ! it Is during solodo.

    From: I b

    Posted: 2 years ago

    Flag as inappropriate

  • court better before them islamist the country. wetting islam the do to the whole world no be religion to associate with oh. if them come open this one now, them don give them power to nurtured terrorist

    From: noname

    Posted: 2 years ago

    Flag as inappropriate

  • Can you imagine the governor of central banking coming to office with that kind of dressing that does not befits an official dressing code for the bank, in a royal muslim regalia. that man thinks he owns nigeria.

    From: michael etuokwu

    Posted: 2 years ago

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  • its sad that simple things are blown out of their proportions.these supposedly educated people go on blabbing unnecessarily.if there is an islamic bank,is anybody forced or mandated to put his/her money there? anyone who wants should go to whatever bank he/she wants to put there money if the islamic bank works,people will take their money there if not thats there headache and not that of anybody from otheer faiths.i think that guy must be a charge and bail lawyer,other than that he should have serious cases that require legal expertise to solve(what with all these thieves in govt and national assembly) abegi,comot for road make serious people do thier things!!!!!!!!!!!!!!

    From: babagana m.d

    Posted: 2 years ago

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  • Hmm, I think the issue is not Islamic the bank but ensuring that the 'interest' generated by banks through legal and illegal ways are sanitized to 'profit'. as a customer of a bank under interest principles whether you gain or lost you must pay back, infact you first pay the interest before the real amount. My advice to Nigerians is that we need to have an opened mind all the times e.g England have such bank why denying Nigerian after all the first set of beneficiaries are not Muslims and they appreciate the conditions guiding the loan given to them.We are ready to appeal to an England court where there is justice.

    From: Muhammad

    Posted: 2 years ago

    Flag as inappropriate

  • No matter the intent of the bank the law is supreme, today inslamic bank tomorrow christian bank the ruling is just. For these who point to the christian university they the school do not require that you the student adheld to christian believes to be admitted to the school and if they do they also should be shot down base on the right of individual over religion

    From: Godwin E

    Posted: 2 years ago

    Flag as inappropriate

  • To the comment by 'yeyedeysmel' - you are so wrong. There is no Islamic Bank in the UK, what we have a Sharia-compliant (thus Islamic) financial products offered by many banks. I live here and have worked in the banking sector.
    To Adebayo Slami: Yes, there is nothing wrong with having interest free products/services within existing banks

    From: Kay Ade

    Posted: 2 years ago

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  • Hmnnn is not by force to do business with Islamic bank, after all there are more than 25 conventional banks.

    From: Bala

    Posted: 2 years ago

    Flag as inappropriate

  • if democracy entails dat i can do things in my own way as long as i don't infringe on anoda man's right i think d bank shld b allowed 2 come and stay 2 text run our system, although d cbn helms man shld equally follow due process as d court has said and let us c who is actually afraid of Islamic banking and wat their fears are all about. wen truth comes falsehood will perish cos falsehood in its nature is bound to perish. forget about all d propaganda from some religious quarter dat it is coming 2 Islamise Nigeria, no measure by any institution can Christianize or Islamise a multi religious country like Nigeria.

    From: ibrahm omeiza

    Posted: 2 years ago

    Flag as inappropriate

  • The actions of Lamido Sanusi generally could only happen in a jungle country like Nigeria. The Chairman of Federal Reserve did not take over Chase Bank,Citi Bank ,GM Motors and others because these Companies were in distress but President Obama only bailed them out with Loans.
    If not Private Business Men,at best,is the States who should apply for License for Islamic Banks.

    From: emmanuelbfakorode

    Posted: 2 years ago

    Flag as inappropriate

  • Thank you Mr Godwin Sunday Ogboji, this is the type of legal suites and class action cases that should be instituted in our time, we are at a cross road in Nigeria, and it is only through these processes can our Judiciary carve a path to living a in society where the rule of law holds sway be achieved. I live in the UK, and over here the rule of law is so strong that no big man would dare mess up, he knows what awaits his faith. So once more Mr Ogboji, bring more cases like these to our courts, since our judiciary has been adjudged as corrupt, at the very least the Judges would work for what they earn in wages and salaries. More class actions my friends. If in Nigeria we cannot go to the streets like other countries, ie revolution, we can at least have out own "Legal Revolution", i bet you guys it would be more effective than all the other revolutions that you've seen, because it would be targeted at the crooks we have in our society and there wouldn't be unnecessary loss of lives.

    From: Okey Andrew

    Posted: 2 years ago

    Flag as inappropriate

  • LET ME START BY PROFESSING TO ALL THAT I'M A CHRISTIAN, A DEVOUT CHRISTIAN. I�VE ABSOLUTELY NO PROBLEMS WITH ISLAMIC BANKING, INDEED I BELIEVE IT�S GOOD FOR THE ECONOMY AND THE PEOPLE WHO CHOOSES TO USE ITS� PRODUCTS AND SERVICES, WHETHER THERE ARE CHRIATIANS, MUSLIM OR PAGANS.

    ANY AVERAGELY INTELLIGENT PERSON WHO IS BROAD MINDED ENOUGH AND TAKES CARE TO UNDERSTAND THE WORKINGS OF THE ISLAMIC BANKING SYSTEM WOULD NOT BE AGAINST IT.

    THE PROBLEM IN THE CASE OF ITS INTRODUCTION IN NIGERIA THOUGH, IS THE BAGAGE THAT GOES ALONG WITH SANUSI LAMIDO SANUSI AS THE GOVERNOR OF CBN, BEYOND THAT ALSO, IS THE UNDENAYABLE FACT THAT IN THE INTRODUCTION OF ISLAMIC BANKING IN NIGERIA, THE CBN HAS CONTRAVANED THE LAW AS POINTED OUT BY THE JUDGE IN THIS CASE. THE COURT IS THERE TO INTERPRETE THE LAW AND THAT PRECISELY IS WHAT THE COURT HAS DONE.

    THE ONUS NOW IS ON CBN AND EVERY RELEVANT ARM OF THE GOVERNMENT TO REMEDY THE SITUATION BY TAKING THE NECESSARY STEPS TO REGULARISE THE EXISTENCE OF THE ISLAMIC BANKS ALREADY LICENSED AND GET THE NECESSARY LAW IN PLACE TO ENABLE THE SYSTEM WORK AND WORK WELL.

    From: Olu Paul

    Posted: 2 years ago

    Flag as inappropriate

  • Whether you like or not Islamic Bank will be established in Nigeria insha Alllah. If it were chrism banking you won't say anything because of your selfish interest. God will catch you

    From: hayatu saidu

    Posted: 2 years ago

    Flag as inappropriate

  • rules should be follow strictly observed in this country

    From: Tarnande

    Posted: 2 years ago

    Flag as inappropriate

  • Even in America and England islamic banking exist talk less of Nigeria. Go to hell

    From: hayatu

    Posted: 2 years ago

    Flag as inappropriate

  • I am happy and vindicated that it ended this way.That will be a bitter lesson for Sanusi.He is suppose to know better but he pretends not to.Now for a battered Economy like Nigeria,when Islamic bank comes to place and people don't pay interest on borrowed money accoding to the tenets of Islamic banking,now how do the bank pay for it's running costs? depositors must not not earn interests,who pays for workers salaries and remunerations?The people in support are rouges who wants everything free .What is the outcome of community bank till today?He is a big fool and should be removed.

    From: joseph

    Posted: 2 years ago

    Flag as inappropriate

  • watch it i hope the purpose if setting up this is not to facilitate terrorist financing in Nigeria

    From: shola daniel

    Posted: 2 years ago

    Flag as inappropriate

  • No one has said that islamic banking is wrong. the point is that its operation in Nigeria will run contrary to the nation and send signals as if the nation is legalizing a state religion and this will be unconstitutional. Islamic bank, according to that judgment, can only be established within acceptable legal frameworks as presently enunciated in our constitution and the CBN Act. Much Ado about thus Islamic banking. The banks we have already are problematic and we are rushing to set up another one?.......

    From: buchi

    Posted: 2 years ago

    Flag as inappropriate

  • The Islamic banking should be encouraged in Nigeria as long as it is set up and operated within the ambit of our laws. Sadly, we tend to politicize everything here.

    From: newman

    Posted: 2 years ago

    Flag as inappropriate

  • Islamic bank is also a process of islamising Nigeria. The southern tribes(Christians)were not consulted. Dis Christians were not consulted wen IBB registered Nig as an islamic state. The North r leading everyone into de islamic world.

    From: Oakman

    Posted: 2 years ago

    Flag as inappropriate

  • The fundamental implication of this court verdict is of great interest. If the CBN allows illegal Jaiz International Bank PLC to continue with Islamic banking operations in Nigeria despite the court ruling, what moral authority will CBN have to stop other illegal financial institutions from operating in Nigeria?

    From: Ken Mani

    Posted: 2 years ago

    Flag as inappropriate

  • when will you people allow us to practice our fundamental right, is't compulsory for you to operate the Bank? can't we for Allah sake do any thing in this country according to our religion?, if usury is allowed in your religion we as Muslims it is forbidding. pls face your business and allow Nigeria Muslims alone.

    From: Yakubu

    Posted: 2 years ago

    Flag as inappropriate

  • Must it be called islamic banking? Is Nigeria an Islamic nation? there is problem with the naming of the banking system. the naming should be re-considered. The CBN Governor should act as if he is above the constitution of this Country. care must be taken to address issues in this country. The fact that certain issues goes down well with a region of the country doesn't make it a popular opinion

    From: Sordum B. Abanu

    Posted: 2 years ago

    Flag as inappropriate

  • Must it be called islamic banking? Is Nigeria an Islamic nation? there is problem with the naming of the banking system. the naming should be re-considered. The CBN Governor should not act as if he is above the constitution of this Country. care must be taken to address issues in this country. The fact that certain issues go down well with a region of the country doesn't make it a popular opinion

    From: Sordum B. Abanu

    Posted: 2 years ago

    Flag as inappropriate

  • I think people should not mistake issues here. THERE IS NO ISLAMIC BANKS IN ENGLAND, BANKS IN ENGLAND AND ELSE WHERE OFFER ISLAMIC PRODUCTS AND BANKS IN NIGERIA ALSO OFFERS ISLAMIC PRODUCTS.

    Again, Islamic bank suffers from the impunity of Sanusi. He is a public office holder, he should not be the face of Islamic Bank. If you ask me, there should be ISLAMIC BRIDGES, ISLAMIC CARS, ISLAMIC OIL WELLS, ISLAMIC POTS AND ISLAMIC POTATOES, I really do not have a challenge with them.

    If Christians have schools and hospitals here and there, did they build it with the prromotion of public office holders or public fund. EVERY CHRISTIAN SERMINARIES IN NIGERIA WERE BUILTBY THE CHRISTIANS, WHO BUILDS THE ALMAJIRIS SCHOOLS NOW, THE FEDERAL GOVERNMENT.

    OF COURSE, NIGERIA IS A REGISTERED ISLAMIC COUNTRY!

    From: Malon Amingina

    Posted: 2 years ago

    Flag as inappropriate

  • Well, issues like this need to be handle with care. To me this Judge is erred in law because the constitution of the Federal Republic of Nigeria provided constitutional rights for religion. If our Christians counterpart in Nigeria are taking Jaiz Bank as Islamic Bank, why not run away from it?

    From: U A Mohammad

    Posted: 2 years ago

    Flag as inappropriate

  • That serves Sanusi mr wise man right, he thinks he can decide for nigeria,Thank God everybody
    is aware of their devilish plans.

    From: dumm

    Posted: 2 years ago

    Flag as inappropriate

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