The Central Bank of Nigeria (CBN) has finalised plans to opt for a centralised approach to regulate Islamic Banking in Nigeria.
The CBN will set up an advisory body,known as the Financial Regulation Advisory Council of Experts, that will oversee the industry in Nigeria. The council will be tasked with ensuring all banking products that are designated as Islamic conform to sharia principles.
According to Ventures Africa, the guidelines, published last week Friday, set out minimum requirements for the advisory body, which will comprise a minimum of five members including one of the CBN official. Members will serve renewable two-year terms, must be qualified in Islamic jurisprudence, and are restricted from working for any other financial institution supervised by the central bank. The guideline also stipulates that the advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.
Financial institutions that offer Islamic banking products in Nigeria are already required to have their own boards of sharia finance experts, who are limited to serving in one institution at a time. However, the centralization is part of the effort to establish the country as the African hub for Islamic finance.
Nigeria has the largest Muslim population in sub-Saharan Africa, virtually half of the country’s 170 million people.
Meanwhile, the CBN has stated that any exporter that uses export proceeds for non-eligible transactions will be barred from the foreign exchange market.