‘Formulate regulatory framework on Islamic banking’ - Adegbite urges CBN

Speaking in Abeokuta, Adegbite said that absence of a regulatory framework for Islamic banking system has been a major impediment against the take-off of the proposed Jaiz Islamic Bank in the country.

"There is a very strong impediment, it may be technical and may not be easily understood by the ordinary people. That is what is called regulatory framework for Islamic Bank in Nigeria.

"We lost the participation of a big foreign investor in the Jaiz Islamic Bank because when they came here, they found that the CBN does not have a proper regulatory framework for the Islamic banking.

"As such they felt that their investments might not be safe enough in Nigeria," Adegbite said, noting that the investors were from an Islamic bank in Dubai, United Arab Emirate.

"It is one of the biggest Islamic banks in the world. Their consultant advised them that they should not come yet until there is a proper regulatory framework," he explained.

He, however, expressed optimism that the Central Bank was already taking steps towards formulating the frameworks.

"I am glad that the CBN is doing a lot now to prepare a suitable regulatory framework for Islamic banking in Nigeria. The existing regulatory framework we have for the conventional banking system in Nigeria is not suitable for Islamic Bank, and so I want to appeal to the CBN to hasten their preparation.

"They should see the Islamic banking project as a reality and in the economic interest of this country. Many countries of the world, many big banks in the world are gearing towards Islamic banking so the CBN should be able to respond to that quickly.

"The task of establishing an Islamic bank in Nigeria has been a daunting task for the management of Jaiz International plc, which is the vehicle we are using to think about the Islamic Bank, Adegbite recalled.

He said that when the idea started during the pre-capitalisation era, N2billion was needed to start the bank in 2004 and "in 2005, we went into the capital market wanting to raise N2.5 billion but we succeeded in raising N2.9 billion, then suddenly this bank recapitalisation came like a bomb shell, as CBN said the minimum capital requirement should be N25billion for the establishment of any bank in this country."

He said that that rattled the promoters of the bank, including him and "we are yet to recover from that blow when we went back to the capital market and all other tricks that followed were better imagined than real".

"But I think all the money we have been able to raise within the country is still about N7billion."

According to him, an Islamic Development Bank has promised to inject $20 million into the Jaiz Islamic Bank while a group of investors from America, who are successful Muslim businessmen, have also shown interest.