Tuesday, March 17, 2009

Nigeria climbs on Shariah banking bandwagon

The Central Bank of Nigeria (CBN) has released a draft framework for the regulation and supervision of the Shariah banking system.
It is understood that the regulator has said that all licensed banks offering Shariah-compliant financial products or services should have a Shariah compliance review mechanism and a Bank Shariah Advisory Committee (SAC) as part of their governance structure, All Africa Global Media said in a report dated March 11.
The CBN guidelines stated: "In line with the provisions of Section 39 (1) of BOFIA 1991 (as amended), banks offering non-interest banking products and services shall not include the word 'Islamic' as part of their registered or licensed name."
"They shall, however, be recognised by a uniform logo to be designed and approved by the CBN. "The CBN shall require all the banks' signages and promotional materials to carry the logo to facilitate recognition by consumers," All Africa Global Media quoted the CBN as saying.
According to the wire's economic intelligence, the guidelines state that non-interest banks shall be licensed in accordance with the requirements for a new banking licence to be issued by CBN from time to time, including a non-refundable application fee of N500,000 (RM12,680) and deposit of minimum capital of N25 billion with the CBN.
According to the guidelines, six months after the grant of approval-in-principle (AIP), the promoters of a proposed bank must also submit application for the grant of a final banking licence with a non-refundable licensing fee of N5 million payable to CBN, the report added.
The report added that all licensed banks or promoters wishing to offer non-interest banking products and services, according to the apex bank, may operate using models such as full-fledged non-interest bank or subsidiary which shall be licensed in accordance with the current guidelines for licensing of banks issued by the CBN.