In its efforts to have a good understanding of the non- interest banking, Nigeria Deposit Insurance Corporation NDIC is in the process of appointing committee of experts to advise it on all issues relating to Deposits Insurance Scheme (DIS) for this model that is still alien to the country.
Although the Corporation had developed a deposit insurance fund framework for this model in May 2015, the dearth of viable investment windows like SUKUK and other Sharia compliant investment portfolios is still a challenge that the regulators in the financial services sector have to collaborate to design sharia permissible investment products.
Besides, the corporation is also challenged by lack of investment instruments for premium collected from the non-interest banking sub sector.
The framework by the corporation is designed to create a level playing field and provide deposit protection for depositors involved in non-interest banking and protect them against any possible losses.
To cope with the new model of banking, the Corporation had also trained its staff in Malaysia for this special area of expertise.
To enlighten Nigerians about the advantages of non-interest banking, Umaru Ibrahim urged the Management of Jaiz Bank Plc, the only Islamic bank in the country to embark on intensive public awareness and financial education on the benefits of non-interest banking practice in the country in order to improve the volume of patronage.
Non- interest banking comes with the benefits of profit and loss banking that is mutually rewarding among all participants in the Islamic banking in line with its business practices.
Ibrahim spoke during a visit by the management of Jaiz bank led by its managing director, Muhammad Nurul Islam.
Jaiz Bank Plc of recent obtained approval–in–principle license from the CBN to become a national bank as well as the waiver granted to it on the reduction of its liquidity ratio from 30% to 10%. This is to create a level playing field as well as engender healthy competition.
Nurul Islam, told the Corporation that Jaiz bank had engaged the Bankers Committee and other stakeholders especially the Debt Management Office (DMO) on the establishment of SUKUK Bond and other Sharia permissible investment platforms for non-interest banks in Nigeria.
In terms of growth, Jaiz Bank in Nigeria had achieved in less than four years of its operation, what took its counterpart in Bangladesh 17 years to achieve.
During the period, the bank had also granted Islamic infrastructure bond facilities to some state governments in the Country in addition to a charity foundation as part of its corporate social responsibility to the society.
AUTHOR: Bayo Adesanya
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