•Go to court, Sanusi tells opponents of Islamic bank
•Grants approval to Stanbic IBTC
The Central Bank of Nigeria (CBN), the Infrastructure Concession Regulatory Commissiosn (ICRC) and the Debt Mangement Office (DMO) have started discussions on the best ways to explore an option of sukuk (Islamic) bonds for financing the infrastructure requirement in the country, Sanusi Lamido Sanusi, CBN governor said.
The DMO had indicated interest in partnership with the CBN to develop and issue Islamic bonds for the Nigerian financial system.
Announcing this in Abuja on Monday at the International Conference on Non-Interest (Islamic) Banking, organised by the apex bank in conjunction with the Islamic Development Bank, Sanusi said the three institutions would explore the possibility of tapping into the liquid ‘sukuk’ market in the Middle East and Asia.
The apex bank has however granted Stanbic IBTC Bank an approval to set up an Islamic banking arm.
As controversies continue to trail CBN’s approval for the establishment of Islamic banking in Nigeria, Sanusi, yesterday, told those opposed to it to go to court.
``So... if anybody says it is illegal, then he should go to the court of law and let the court pronounce the legality or illegality of it,’’ he said.
The CBN governor reiterated that the apex bank was not in any way promoting or establishing an Islamic bank in Nigeria, contrary to speculations in some quarters.
``But we don’t think the court will say so because we know we are acting within the realm of the law, but it is only the court of law that can make a pronouncement on the legality of anything.”
He however assured that the bank will stop the establishment of non-interest Islamic banking if the court declares it illegal.
``The Central Bank is not promoting or establishing Islamic bank, the Central bank is simply licensing and regulating an institution that is allowed to exist under the law.
``To the extent that this bank is not allowed to deny anyone, the opportunity to be a stakeholder and to the extent that they do not deny anyone to set up his own bank.
``There is absolutely no discrimination. We have to continue making that point, hopefully, people will get to understand with time,’’ he said.
The CBN boss maintained that non-interest banking was in practice in about 435 institutions and in about 75 countries of the world.
He noted that with the guidelines in place, Nigeria was set to join the league of other countries to benefit from non-interest banking.
Kingsley Moghalu, CBN deputy governor, Financial System Stability, also speaking, said there was no need to express fears about the introduction of the non-interest Islamic banking in the country.
He said the operation was based on pure business proposition and universal accessibility for all purpose, irrespective of religion, culture, race or gender.
“As a value proposition, it is faith, gender and religious blind. Non- interest Islamic banking is offered in western and financial centres such as London, Japan and Singapore,’’ he said.
To ensure effective operations, the CBN governor said Nigeria has joined the Islamic Financial Services Board and has also ensured collaboration between the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC).
He added that the apex bank had also signed a Memorandum of Understanding (MoU) with the Bank of Malaysia on issues of “regulator cooperation and collaboration.’’
He observed that the ethno-religious diversity of Nigeria called for mass awareness, as misconception of the system might jeopardise the process.
“For us in the CBN, we will like this conversation at the conference not to be a conversation between Muslims and Christians because Islamic banking is a universal product.
“We will like it to be conversation on finance, economics; it is about deepening the financial system and enhancing financial system stability and financial access,’’ Sanusi said.
He noted that global institutions such as Citi Bank and Standard Chartered Bank were among the foremost providers of the non-interest banking in the world.
Danladi Kifasi, permanent secretary, Federal Ministry of Finance, said non-interest banking was all about profit and loss and ability to develop trust.
Like others, he too stressed that it was not a religious product and would instead be another potential avenue for employment creation in the country.
Working in the same direction, the Nigerian unit of South African lender, Standard Bank has won approval to set up an Islamic banking arm.