Unnecessary Hysteria Over Islamic Banking


There is so much hue and cry across the country about the introduction of Islamic banking. Christian leaders have been the most vociferous in rejecting the idea, believing that its introduction is an attempt to Islamise Nigeria.

Governor of Central Bank of Nigeria, CBN, Lamido Sanusi Lamido stirred the hornet’s nest on 20 June, 2011 when he announced that CBN had granted approval to Jaiz International Bank to operate Islamic Banking in Nigeria. The South African-owned bank, Standbic IBTC has also got a licence.

Some Christian leaders believe that Sanusi is playing with fire because introducing Islamic banking in a secular country such as Nigeria is a time-bomb that could explode and devastate the country.

Nigerians are too passionate about religious issues and a little spark over religion could lead to a conflagration. The Christian leaders believe that this peculiarity of the nation should have been taken into consideration before introducing Islamic banking.

But it appears there is a lot of misconceptions about Islamic banking, hence the unnecessary hysteria it has so far generated. Islamic Banking is based on Islamic law of economics, some of which are: prohibition of transactions that attract interest, unjust enrichment, gambling and exploitation. Though Islamic banking prohibits interest on loans, it shares in the profit of the business the loan was used to finance. These are benefits conventional banks do not offer. An investor would jump at Islamic banking because of these rather than settle for the cut-throat interest conventional banks slam on the loans they grant investors. Conventional banks charge as high as 25 percent interest rate even though CBN bench mark rate is 8 percent.

Former Governor of CBN, Chukwuma Soludo, a Christian, was said to have approved it before he left office. Besides, Sanusi says Islamic banking is enshrined in the Banking and Other Financial Institutions Act, BOFIA, 1991 as amended; specifically sections 9, 23 and 52. Stanbic IBTC Bank owned by South Africans was the first bank granted the license to operate Islamic banking in Nigeria.

In spite of its inherent advantage as a non-interest bank, it is its name that has thrown up the whole brouhaha that has continued to heat up the polity. In a country where religion plays a vital role in socio-political engineering, the name ‘Islamic’ clearly conjures in the minds of Christians that the bank has to do with Islamic faith and as such it should not be forced down the throats of Nigerians who are not Muslims. But this is a wrong perception. Nobody can be forced to open an account with the bank or transact business with it, whether he is a Muslim or Christian.

Some members of the House of Representatives have suggested that the tag ‘Islamic’ be removed and replaced with ‘non-interest’ banking in order to make it acceptable to all. Some of these lawmakers were angry last week after Sanusi went to the House to explain what Islamic banking was all about but they were not allowed to ask him questions when he finished educating them about it. We also believe that the hue and cry over Islamic banking could be doused if the tag ‘Islamic’ is removed. As long as that tag remains, Christians will feel very uncomfortable to embrace it, its immense benefits notwithstanding.

Certainly, Christians have a right to oppose any institution that appears to give Islam an advantage. But we dare say their opposition is too emotive. As we run a free economy, the proposed banking regime will not be forced on any Nigerian. It also does not preclude Christians from establishing ‘non-usury’ banks to compete with so-called “Islamic banking”.

We want to appeal to Christian leaders to put a lid on further sentimental outbursts over “Islamic banking”.

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