By Maram Mazen Khartoum
Stanbic IBTC Bank, a unit of JSE-listed Standard Bank, has won approval from Nigeria’s central bank to provide Islamic banking services in Africa’s most populous nation.
A preliminary licence was awarded to Stanbic last week for a sharia-compliant banking window, the first one given to a commercial bank in the country, Central Bank of Nigeria deputy governor Kingsley Moghalu said in an interview on Friday. Islam bans paying and receiving interest.
Nigeria’s 150 million-strong population is divided almost evenly between Muslims and Christians, providing it with a significant market for Islamic banking products.
Central bank governor Lamido Sanusi said last month that Nigeria wanted to be a “hub of Islamic finance” in the region and planned to sell its first Islamic bond, known as sukuk, within 18 months.
“We know a number of other banks are interested in applying for non-interest banking windows,” Moghalu said. “We are preparing our officials to be able to regulate that space, and a lot of training is taking place in that context.”
Stanbic spokesman Bimbo Ashiru could not immediately comment yesterday. Standard Bank is Africa’s biggest lender.
The central bank had given approval to Jaiz International Bank, a local lender with international investors, to open the country’s first sharia-compliant bank, Moghalu said.
Stanbic had a licence to begin operating Islamic banking branches within six months and if it failed to do so within that time, the lender would need to reapply for approval, he said.
London-based Standard Chartered had indicated to the central bank it was interested in seeking a licence to provide sharia-compliant banking services, Sanusi said in the capital, Abuja, yesterday.
Moghalu said Islamic banking “has significant potential but it’s subject to the risks that go with every other type of banking activity”.
Nigeria is trying to stabilise its banking industry after a debt crisis in 2009 almost led to its collapse. Sanusi fired the chief executives of eight lenders, pumped 620 billion naira (R27bn) into ailing banks and created a state-owned company to buy bad debts.
The central bank has faced criticism from Christian groups that the introduction of Islamic banking might fan religious tension.
Cosmas Ilechukwu, the chairman of the Christian Association of Nigeria in Imo state, said Sanusi, a Muslim who studied Islamic law, was trying to promote his religion under the guise of banking reform, Vanguard newspaper reported on Friday.
“This is a financial product,” Moghalu said. “It’s got nothing to do with religion.” – Bloomberg
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