Islamic Banking: The Controversy over Non=Interest Banking system in Nigeria

Islamic Banking: The Controversy over Non=Interest Banking system in Nigeria

Author by Dr. Monisola Alao

Journal/Publisher: . Arabian Journal Of Business And Management Review

Volume/Edition: 1

Language: English

Pages: 65 - 77

Abstract

The Central Bank of Nigeria (CBN) approval of a Non-interest Islamic banking in Nigeria has generated a lot of controversy along religious divide and this motivated the study. It was descriptive study that relied on secondary sources of data and adopted content analysis method. It observed that Nigeria is a secular State and issues bordering on religion are sensitive and explained why the opposition to it assumed religious dimension. The study found that the principles of Islamic banking that originated from Q30:39, 4:161; 3:130-132 and 2:275-278 is biblical as contained in Exodus 22:25, Leviticus 25: 35-38 and Proverb 19:17 and may challenge sharp practices in Commercial banks thereby enhancing avoidable access to facilities. The study concludes that Christian bodies have slept too long over the welfare of the active needy as free interest banking scheme predated Islam. Since the services cannot be compelled on unwilling individuals, the regulatory institutions must be alert that unscrupulous elements will not use the channel for funding terrorism. The study recommends the adoption of productive engagement with diverse religious elements to minimize its misrepresentation and avoid diverting public fund into the exercise. In addition, the operators of the banks should avoid excessive discrimination in service delivery to justify that the services are people oriented while critics could embark on such venture.


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