Governor of the Central Bank of Nigeria (CBN), Lamido Sanusi Lamido, has offered an insight as to why proposed Islamic bank, Jaiz International Plc, is yet to be granted operational licence.
The CBN boss disclosed that the bank is yet to meet the mandatory N25 billion capital base requirements. Sanusi spoke while responding to a question from a member of his audience at the convocation square of Bayero University, Kano (BUK) held at the weekend in Kano.
Jaiz International Plc was incorporated on April 1, 2003 as a public limited company with an authorised share capital of N2.5 billion (US $18.5 million). The main objective is to be an investment holding company to set up non-interest institutions such as Islamic bank, Takaful, Pension Fund Administration.
Sanusi urged prospective customers of the bank, who have been craving for a non-interest banking institution to tarry awhile and wait for the outcome of the planned review of the banking system in Nigeria. He expressed the hope that by the time the exercise is through Jaiz Bank may scale the capitalisation hurdle.
Sanusi, who acknowledged that Jaiz is in possession of depositors monies, warned members of the mainly Muslim audience not to approach the issue of licensing Jaiz Bank from an emotional viewpoint, stating that Islamic banking is potentially more risky to manage than the conventional banks, he made reference to how Islamic banking collapsed in Egypt due to the absence of an institutional framework that can guarantee corporate governance.
Nevertheless, he stated that Malaysia and Indonesia are good models where Islamic banking thrived successfully without any known hitches.