Islamic Bank to Commence Business in Nigeria

The Managing Director and Chief Executive Officer the proposed Islamic banking in Nigeria – Jaiz International Bank, Mohammed Mustapha Bintube has said that the bank would commence operation before the end of 2010.
 
Bintube disclosed this when Islamic Finance Working Group of Nigeria visited some regulatory agencies in the country that included Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC) and Debt Management Office (DMO) in Abuja to work out modalities for the commencement of non-interest banking in the country.
 
He said they are visiting regulators so that Islamic and non-interest banking can be strengthen in Nigeria to be able to compete favourably with other countries like Egypt and South Africa.
 
The banker said the reason why Jaiz Bank is slow in commencing operation is because there is no compliance instrument for Islamic finance or non-interest banking in Nigeria. According to him: “The second reason why we have not started is that the share size of the capital was increased from N2 billion to N25 billion and therefore the level of risk has increased significantly and people did not want to take bigger risk on something that is new.”
 
“All stakeholders are working together to make sure that non-interest bank or Islamic bank takes off successfully in Nigeria. We have challenges in policy framework, on capacity building and on customers’ orientation.”
 
Acting Managing Director of NDIC Ibrahim Umaru said the Corporation will work with the team for the speedy commencement of Islamic Finance in Nigeria. He advised the group that they need to have appropriate legal framework, develop compliance and educate consumers who would want to avail themselves on the opportunities of non-interest bank.
 
While NDIC is developing a deposit insurance framework for the operation of non-interest (Islamic) banking in the country, the CBN is also developing framework for the regulation of non-interest banking and Islamic financial institutions.
 
Currently there are some banks in Nigeria that provides non-interest banking which include the Standard IBTC, Bank PHB, Diamond bank and now the proposed Jaiz International Bank.

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