Tuesday, February 24, 2015 10:10AM / Thisday
As part of efforts to promote non-interest financial services, which is also known as Islamic finance, the Central Bank of Nigeria (CBN) has unveiled the guidelines for the establishment of an advisory body on this form of banking.
The central bank explained in the document posted on its website on Monday that an essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services requires the establishment of an advisory body. The body is to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.
Non-interest financial services in Nigeria provide for the establishment of an advisory body at the CBN on Islamic banking and finance.
According to the guidelines from the CBN, the body is shall be called the Financial Regulation Advisory Council of Experts (FRACE).
The council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective regulation and supervision of NIFIs in Nigeria.
“The FRACE shall be established as an expert advisory organ to advise the CBN on matters of Islamic commercial jurisprudence as they relate to the operations of NIFIs. Members of the FRACE shall be appointed on a part- time basis.
“The appointment of members of the FRACE shall be for a term of two years, renewable subject to satisfactory performance. The FRACE shall comprise a minimum of five members. The Special Adviser to the Governor on Non-Interest Banking shall be a member, while the Director, Financial Policy and Regulation Department shall serve as the Secretary.
“A member of the FRACE shall be an individual and not a corporate body or institution. A member shall at a minimum possess required knowledge, expertise and experience in the field of Islamic Jurisprudence with specialization in the field of Islamic Commercial Jurisprudence,” it stated.