Banking institution is a place where individuals or corporate organizations alike deposit their money for personal or business transactions for the purpose of saving, current or fixed transactions that would generate profit over a given period of time. Nigeria, as one of the world’s growing economies, has taken the right step to restructure the country’s banking system. It dates back to the year 2005, when all existing banks were ordered to recapitalize up to a minimum balance of N25 billion or risk losing their operating licenses during the leadership of Prof. Charles Chukwuemeka Soludo, then governor of the main bank. of Nigeria, the Central Bank of Nigeria.

Interestingly, this paved the way for an organized and prosperous banking sector in which some of the banks hit the expected benchmark, while others merged and few fell by the wayside. However, this reform created a free flow of capital funds for the banks to play with: the beginning of universal banking. One would not forget the role banks played in the capital market during the boom era, when investors borrowed or took out a margin loan from these banks at interest rates ranging from 7% to 20% with the in order to make abundant profits from your prized invested shares. Unfortunately, the proliferation of all types of transactions in our capital markets over time represented the downfall of the economy. It should also be mentioned that Africa was not alone in this economic impasse, as most countries in the world suffered the same fate, including the United States of America.

In their bid to restore the good old days, the world’s economic experts and academics came up with solutions to revive the economy. Nigeria was not left out of the fight. With the emergence of Mallam Sanusi Lamido Sanusi as the next Governor of the Central Bank of Nigeria, succeeding Prof. Charles C. Soludo, he sprang into action to continue the good deeds of his predecessor. Between 2009 and 2010, about five bank bosses were charged and prosecuted for misuse of depositors’ funds, ranging from personal misappropriation of funds, unauthorized unsecured lending, and wasteful spending. While others are currently on trial. Having seen the good deeds of the new Governor of the Central Bank of Nigeria, the Presidency recently established the Asset Management Corporation of Nigeria. The Asset Management Corporation of Nigeria aims to acquire ‘toxic’ assets from troubled banks and would take most of the shares in insolvent banks after plugging their capital shortfalls. Public commentators praised the government for this initiative that gradually restored investors’ confidence to invest in both the money and capital markets. It is no wonder that on April 26, 2011, the prestigious Times magazine recognized Sanusi Lamido Sanusi as one of the 100 most influential people in the world in a great Time Gala awards ceremony held in the United States of America. Although, to the extent that the reforms seem to rein in the excesses of banking operations, the adverse effects are quite frightening, as capital and money markets are currently experiencing low investor confidence following another three-bank buyout. (Afribank, BankPHB and Spring Bank). ) by three relatively unknown companies (Main street, Keystone and Enterprise) respectively on August 5, 2011 by the Sanusi-led Central Bank of Nigeria.

However, in early 2011, Mallam Sanusi Lamido Sanusi reopened the implementation of interest-free banking, popularly known as Islamic Banking, which was initially presented by his predecessor as one of the verifiable tools to revive the negatively biased economy. According to Wikipedia, the world’s free encyclopedia, “Interest-free banking appears to have a very recent origin in which a working partner gets a larger share of the profits compared to a dormant (non-working) partner.” What this simply means is that both the banks and the investors (working partner) would get a larger share of the profits after a certain business transaction. One would wonder, would this build the nation’s economic growth as practiced in the UK, Malaysia, etc.? It would definitely build the fortunes of our economy, but the way we do it is what is technically wrong. Please read the June 29, 2011 online business day for further explanation. The Governor of CBN is entitled to speak about the benefits of whatever product or scheme the major bank is implementing, but attaching more religious sentiments than professional and economic gains would lead the country into a very difficult situation.

This proposed style of banking has generated heated discussion and debate in all parts of the country. Remember that Nigeria is a secular state with almost equal numbers of faithful Christians and Muslims in the population not to mention other religious and traditional groups. For example, the leadership of the Christian Association of Nigeria (CAN) has strongly opposed the implementation of Islamic Banking citing some erroneous approaches of the Central Bank of Nigeria led by Sanusi such as the use of state funds to promote the implementation of the scheme without appeal to other religious groups in the country. The country still faces serious security threats from kidnapping, militancy and most worryingly, terrorist attacks by the feared sect, boko haraam especially in the Federal Capital (Abuja) and other parts of the north of the country. It is surprising to know that the Presidency has remained silent on the matter that needs urgent intervention to correct the facts, since the masses want better governance in terms of economic and socio-political gains.

Whatever the outcome of the proposed Islamic Banking by the Central Bank of Nigeria, the apex body should consider the following points as the way forward:

1. That the processes of implementing interest-free (Islamic) banking must be carried out in strict compliance with the procedures established by the regulatory authority – the Central Bank of Nigeria.
2. That it also has greater benefits for Islamic banking investors without directly or indirectly affecting other banking investors of interest in the same sector.
3. That the Central Bank of Nigeria continue to raise more public awareness of Interest Free (Islamic) Banking through a round table with all stakeholders including: religious sects, economic experts, legislators, government officials and the media to dispel any misconceptions of the proposed scheme.

The fact that interest-free (Islamic) banking with its many economic benefits, as practiced by some countries in the world, the Central Bank of Nigeria, under its current leadership, has to convince 55% of over-enlightened Nigerians about its benefits without negatively. affecting the other party interested in economic growth and tranquility.