Islamic Banking: CBN May Face Legal Battle

29 Jun 2011

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CBN Governor, Sanusi Lamido Sanusi

Just like the process leading to the recapitalisation of the rescued banks, there are strong indications that the planned introduction of Islamic banking into the country may be trailed by a barrage of legal tussle.

THISDAY gathered that various pressure groups and even religious bodies have concluded plans to drag the apex bank to court over the form of non-interest banking.The source who maintained that the decision to establish the first Islamic bank in Nigeria was against the unity of the country, added that his association will ensure that they throw spanner in the works of the CBN.

According to the source, the proposal is completely against the Federal Character Principle entrenched in Section 14(3) which states that: “The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty.”

Islamic Banking is a non-interest type of banking that is different from the conventional banking in so many ways. It is based on Islamic law of economics and works in such a framework that follows certain rules and regulations. This form of banking also proscribes usury, trading in financial risk (gambling) and investing in such businesses that are against the general principles of ethics.

Chief Executive Officer, Pharez Consulting, Mr. Eghes Eyieyen,  stated that with the proposed introduction of Islamic banking, the CBN plans to foist on the nation, a needless controversy.

Eyieyen who said this in a report e-mailed to THISDAY, also argued that with the move, the apex bank purportedly assumed legislative powers which it does not have.

CBN Deputy Governor, Financial System Stability, Dr.  Kingsley Moghalu, had assured Nigerians  the CBN did not have any ulterior agenda in it plans to introduce Islamic banking.

Moghalu had explained: “I will like to very clearly assure Nigerians that non-interest banking is part of our plans to increase the inclusion into the financial, people who have stayed out of the financial system for various reasons. There is no agenda; it is simply finance and not about religion. I want to further assure Nigerians very clearly that non interest banking is open to people of all faith and all types of non-interest bank application are welcomed at the CBN.”

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