CRITIQUE OF THE NON-INTEREST BANKING FRAMEWORK IN NIGERIA

The released framework by the Central Bank of Nigeria (CBN) for the regulation and supervision of non-interest banks (NIBs) in Nigeria on 13 January, 2011, has laid to rest the debate on whether or not the government recognises the potentials and viability of Islamic banking and finance (IBF) in Nigeria and has posed a new challenge of how to successfully implement the provisions of the new framework in the context of the existing conventional financial system. Using a literature survey, this paper provides a critique of the non-interest banking (NIB) framework in Nigeria and examines the challenges of introducing it into the current conventional system. The paper observes that, with the framework, an opportunity has been created for banks that are interested in providing financial products and services based on the principles of the Shari’ah to do so through full-fledged non-interest banks and windows or subsidiaries of interest-based conventional banks. It however posits that unless some factors are considered in its implementation, the provisions of the framework―though laudable―may not take the IBF industry far. The paper therefore suggests that the CBN, bank operators and other stakeholders should take very seriously the issue of manpower and infrastructural development and strict compliance with the guidelines in order to successfully apply the framework.