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Despite Muslims accounting for roughly 45 per cent of the population in Nigeria, there is to date only one Shari'ah-compliant bank in the country, Jaiz Bank. As in many other countries where Islamic banking is still rare, Nigeria's lack of a Shari'ah board to advise on conf lict resolution and regulatory details has made it challenging for banks to establish proper Halal frameworks.
That could be changing soon with the new guidelines set out by the Central Bank's Financial Policy and Regulation Department.
The guidelines include the establishment of a Financial Regulation Advisory Council of Experts (FRACE) to advise the CBN on Islamic jurisprudence.
"An essential governance structure and element of regulatory oversight for institutions offering non-interest [Islamic] financial services is the establishment of an advisory body at the level of the Central Bank to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest [Islamic] Financial Institutions [NIFIs] are in compliance with the rules and principles underpinning their operations," the CBN said.
Members of FRACE will be appointed for renewable two-year terms and the council will consist of a minimum of five members. The Special Adviser to the Governor on Non-Interest Banking shall be a member, while the Director, Financial Policy and Regulation Department shall serve as the Secretary.
The CBN stated that to serve on FRACE, members need to 'possess knowledge, expertise and experience in the field of Islamic jurisprudence with specialisation in the field of Islamic commercial jurisprudence' as well as knowledge of Islamic law, the Arabic language, and...