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Islamic Banking Opponents in Nigeria Seek Interest-Free "Christian Banking" Licenses

08/08/2011 02:13:08 PM GMT   Comments ()     Add a comment   Print     E-mail to friend

08 August 2011

Having failed so far to convince the Central Bank of Nigeria (CBN) to withdraw its current guidelines on Islamic Banking, there are indications that some Christian groups may have decided to use a new approach to challenge the apex bank on the issue.

Instead of continuing to protest against what they perceive to be the CBN's attempt to use the guidelines to promote Islam over other religions, the Christian groups are now planning to apply to the apex bank for a non-interest banking licence that would allow them set up a bank that would operate in accordance with "Christian principles".

In order to mobilise fellow Christians to support the plan, these groups have started going round churches in the Federal Capital Territory (FCT), Abuja, conceived this line of action in response to the CBN's assertion that its guidelines also allow non-Muslim groups to apply for their own non-interest banking licence.

For instance, the relevant section of the guidelines which top officials of the banking watchdog cite to support their claim, reads: "In line with CBN's objective of promoting financial inclusion in Nigeria, individuals and groups wishing to practice non-interest banking based on established rules and principles other than Islamic may apply for a licence to operate such institutions, and the CBN will accordingly issue guidelines pertinent to that type of banking."

However, some see it as merely a ploy by the Christian groups to test the CBN;s pledge that other groups which apply would receive the same amount of attention that the current guidelines give to the Islamic religion.

"In the church I attend," one christian activist said, "people are really angry over the CBN's position on the Islamic Banking issue and they have decided to apply for a Christian banking licence to see if their application will be approved and what kind of guidelines the CBN will issue to govern Christian banking. They have also started going to other churches to get more people to support this plan."

The suggestion has also been put forth by Muslims. In an editorial in Daily Trust, Muslim commentator Yushau A. Shuaib wrote that those who are "clamouring against the introduction of Islamic banking should be advised to channel their energies towards ensuring realisation of Christian banking in Nigeria that could be fashioned in line with biblical injunctions."

He even went so far as to quote the Bible: "...charging interest on loans as well as investment in prohibited goods and products are not only abhorred in the Qur'an but also have references from verses in the Bible. Some sections in the bible that prohibits usury for instance in the King James version of Bible include: Exodus 22:25-27, Leviticus 25:36-37, Psalm 15:1-5, Deuteronomy 23:19-20, Jeremiah 15:10 , Ezekiel 18:7-9, 17 and Matthew 25:27 just to mention a few."

Nevertheless, industry analysts say that if Christians apply for "Christian banking" licences, the CBN could find it difficult drawing up guidelines for this form of banking mainly because it is not as well developed as Islamic Banking.

"Of particular interest is whether the contentious section in the current guidelines which states that the CBN will establish an Advisory Council of Experts to advise it on Islamic Banking will also be found in the guidelines for the other types of non-interest banking. Christians have criticised this proposed council of experts and they will be watching out to see if such a council will also be proposed for them," one analyst said.

But in a telephone interview with The Moment, the National Secretary of the Pentecostal Fellowship of Nigeria (PFN), Pastor Wale Adefarasin, denied knowledge of any Christian group seeking to apply for a "Christian Banking" licence.

"I'm not aware that Christians are seeking to apply for licence for non-interest banking. As far as we are concerned, there is nothing wrong with Islamic banking; we have nothing against Muslims having their own form of banking. What we find wrong with the process is that the CBN is the driving force behind Islamic Banking. We say this is wrong, because the Nigerian Constitution does not recognise any particular religion as state religion."

"The CBN as the regulator can produce guidelines for non-interest banking, but it should not produce one set of guidelines for Islamic banking and another for other forms of non-interest banking. The CBN, for example, has no business dictating to a bank that it should not grant loans to a company dealing in pork. The CBN should only restrict itself to issuing guidelines and leave religious groups to promote any form of banking they wish to promote."

CBN spokesman, Mohammed Abdullahi, stated that the apex bank had not yet received any application from Christian groups for non-interest banking licence.

"We have not received such requests. But I wish to assure you that as soon as we receive applications to license non-interest banks under other principles, the CBN will study such requests and issue necessary supervisory and regulatory guidelines. But we need to know the principles before we can come up with the appropriate guidelines."

Sources:

Tony Chukwunyem, "Islamic Banking: Christian groups may apply for own licence" The Moment August 8, 2011

Yushau A. Shuaib, "Nigeria: A Muslim's Thoughts on Christian Banking in the Country" Daily Trust August 5, 2011

Reproduced with permission from Islam Today

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