Re: CBN and Non-Interest Financial Institutions

A few weeks ago, a document which decried the planned introduction of the Shariah (Islamic law) banking system under the Section 61 of the Banks and Other Financial Institutions Act of 1991 (BOFIA) started circulating. This document did not come from an unusual quarter as the signatories to it include a Christian NGO and some pastors, and the crux of their objection includes the “illegal redefinition of non-interest banking, introduction of religion into banking, unconstitutional exclusion of non-Muslims from non-interest banking and major contravention of the Nigerian Constitution”.

The red-herring document was closely followed by an editorial in the Guardian newspaper on 8th June 2011 titled “CBN and non-Interest Financial Institutions” which purports to speak for the ideals of equity, equality and democratic values. While it is easy to dismiss the cheap propaganda of the extreme elements that produced the document as inherently and transparently flawed, the attempt by the Guardian newspaper to editorialize the sentiment contained in such a publication reinforces the belief that islamophobia from certain mercurial personalities is finally gaining respect and sadly, their views are being integrated into mainstream journalism.

The authors of the material sought to drip-feed the whole populace with negative propaganda for only one reason- their morbid hate of Islam. The editorial in the Guardian newspaper is only capable of inspiring the rank and file of this group to intensify their attack against interest-free banking system, with no regard whatsoever to the shared benefits that system guarantees. The Guardian editorial took a strong objection to the use of ‘Moslem or Quaranic’ (both non-words!) names in the framework that seeks to legalise and regulate the nation’s non-interest based Islamic banking system, and calls to question the need for a varied initial minimum share capital base for companies wishing to engage in it.

The editorial accuses the Central Bank Governor, Mallam Sanusi Lamido, of setting “out to dismantle the universal banking system itself by creating three categories of banks whose individual operating licences are obtainable at different initial minimum share capital base.” It furthers states that “The issued guidelines ill-advisedly employ more or less synonymous terms like ‘sharia-compliant’, ‘sharia governance’, ‘sharia advisory council’, ‘sharia advisory committee’, ‘Islamic jurisprudence’, Islamic bond’, ‘Islamic treasury bill’, all of which could be replaced with the qualifying phrase like ‘non-interest’ or ‘profit and loss sharing’ without any impaired meaning.” The obvious question that must be asked is this: why is the concept of interest-free financial transaction bad news to anyone? The Guardian newspaper only must have arrived at such a sweeping and hasty judgment without due regard to the principle of this banking system and the best practices around the world. Its objection is therefore frivolous.

The editorial conveniently ignores the growing acceptance among Muslims (and non-Muslims) of Shariah-compliant savings and investments which now stands well over $822 billion globally, and growing at a rate of 10-15% per year with signs of consistent future growth. According to Standard & Poor’s Ratings Servicesthe potential market for Islamic market is $4 trillion. For nations, organizations and millions around the world who are not blinded by bigotry and hateful prejudice against Islam, the Islamic banking system is the new hope on the horizon.

The Guardian editors misinformed the public by stating that “it is unnecessary, as contained in the guidelines, to set up advisory committees to be made up of members who are well versed in Arabic as well as advisory councils to be outsourced for purposes of interpreting and recommending acceptable non-interest bearing financial products and services. Mullahs should not be given the official role of teleguiding the chief executives of any financial institutions in Nigeria.” This is simply untrue and only a cursory check on countries, including Western countries, where this system of banking is practiced would reveal the stark untruths in the assertion. It is surely unfortunate that Guardian newspaper will arrive at such a conclusion, but to impugn that some ‘mullahs’, a buzzword deliberately used to denigrate Muslim scholars, will be teleguiding CEO of financial institutions in Nigeria is rededicating the newspaper to sensationalism and partisanship. All major providers of Shariah-compliant products in the world, vast majority of which are capitalist organizations, have Shariah advisory boards and committees comprising exclusively of Muslims of required knowledge and skills in Islamic banking, Islamic economics and Islamic jurisprudence. These Islamic scholars do not ‘teleguide’ CEOs, rather because Islamic banking activity has to be consistent with Shariah principles and guided by Islamic economics, they collaborate with them to assure that their products are fit for purpose. Such collaboration works well even in societies that are completely secular, forcing the nerve centre of Islamic banking from the East to the West. It is the regulation, rather than the name, that makes Islamic Banking truly Islamic. How the Guardian newspaper got this elementary knowledge so wrong is difficult to grasp.

It is sadly all too obvious that a well-orchestrated plan is underway to antagonize and delegitimize this innovative system of banking and the opposition, no one must be deceived, is being driven on the current of anti-Islam sentiments. In any secular country that respects citizen rights, Muslims must have the right to practice their faith totally, and it is a constructional duty that the state does not interfere with this right, but enable it. The wisdom of the framework to establish the Islamic banking system is to provide conventional legal and regulatory infrastructure to address some salient characteristics of Islamic finance with the regulatory body, Central Bank Nigeria, and this is a system that all the Nigerian citizens will benefit from. The historic call for such introduction is the right of more than half of Nigerian population which up till now, has been ignored.

The Nigerian Christian community has to re-assess how it deals with the Muslim community in Nigeria as regards legitimate yearnings, aspirations and rights of the Muslim community. Unbridled hate, mindless attacks and religious antagonism of some within that community of everything Islamic is only a bad reflection of their own state and how much they have moved away from the peaceful and tolerant pristine gospel that Jesus Christ (AS) preached and lived by. These faith warriors need to calm down, take a deep breath and take a look in the mirror to see if they like their own images. Change may be tough, rough or scary, and some selfish interests will be ended, yet collaboration for common good, national interests and mutual respect are the only way to go.

The Guardian newspaper concludes its editorial with a cliche, that CBN should “rewrite the guidelines in conformity mandatorily with the restriction placed under BOFIA on the use of Islamic, Moslem or Quaranic names”. The Islamic banking is practiced by more than 300 institutions spread over 51 countries, most of these countries are both secular and non-Islamic states, and the Muslim population ratio is tiny compared to Nigeria. Every single of those countries has the words Islamic, Muslim and Quranic written in the instruments that grants legality and regulation to the practise. Why should Nigeria be different, and how is the Islamic banking system a threat to the Nigerian secular status? If this issue has now turned into a debate, the Guardian newspaper must review its role in the debate. As a newspaper that prides itself on “presenting balanced coverage of events, and of promoting the bes
t interests of Nigeria” and self-commit itself to “uphold the need for justice, …… and equal protection under the laws of Nigeria for all citizens” it must rededicate it capitals to promoting inclusive dialogue and not act as a lonely divisive voice. Many secular nations have provided good leadership and right examples that we must copy to our own benefits. Muslims accept robust and informed critique of issues as inherently beneficial and as part and parcel of the tool of engagement in a multicultural, multi-religious society, but smear-casting the celebrated Central Bank governor or fanning the embers of religious intolerance and antagonism in the name of ensuring adherence to the principles of secularism only plays into the hands of a few die-hard extremists and undercover Islamophobes.

It is important to clarify that the Qur’an is the source of divine guidance which Muslims follow both in their private and public life. This is set out in Shariah law, which covers all aspects of life, be it the giving of charity, praying, financial transactions, marital relations, forgiveness and implementing justice for all of humanity. The Qur’an formed the spiritual, intellectual and political foundation of the Islamic civilization which was one of the pinnacles in human history.

Kamor is the Director of Media and Communications Muslim Public Affairs Centre, MPAC Nigeria

NNN.COM.NG is a portal where you can read latest Nigeria News from all Nigeria Newspapers such as such as Punch, Vangaurd, Daily Times, Thisday, Guardian, Nation, Leadership and more in one place. NNN aggregates Naija News and sort them according to their sources, category and relevance as a way of reducing the effort a news reader needs to put in to reading breaking news in Nigeria and across the world.

Leave a Reply