The Central Bank of Nigeria (CBN) has issued guidelines for an advisory body that will oversee Islamic banking in Nigeria, becoming the latest regulator to opt for a centralised approach to the industry.
Nigeria’s advisory body, known as the Financial Regulation Advisory Council of Experts, will be tasked with ensuring all banking products that are designated as Islamic conform to sharia principles.
The guidelines, published on Friday, set out minimum requirements for the advisory body, which will comprise a minimum of five members including a CBN official.
Members will serve renewable two-year terms, must be qualified in Islamic jurisprudence, and are restricted from working for any other financial institution supervised by the CBN.
Financial institutions that offer Islamic banking products in Nigeria are already required to have their own boards of sharia finance experts, who are limited to serving in one institution at a time.
The CBN’s advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.
Countries including Bahrain and Morocco have opted for such a format, which can help to limit differences between products, speed the design of new products and boost investor confidence.
