Breaking News

FG to establish Islamic bank

The Federal Government plans to establish a non-interest (Islamic) bank in the country to assist low income earners in the delivery of financial services at affordable costs.

Alhaji Umaru Ibrahim, Acting Managing Director, Nigeria Deposit Insurance Corporation (NDIC), made the announcement, Wednesday, in Abuja, at a one-day sensitisation seminar on Non- Interest (Islamic) Deposit Insurance Scheme.|

He said the decision to establish the bank was in consonance with the principle of financial inclusion, which entails the delivery of financial services at reasonable or affordable costs to a large segment of disadvantaged and low income group. “It is on record that one of the ways of alleviating extreme poverty in developing countries such as Nigeria is the provision of banking services and adequate credit facilities to vulnerable groups,” he added.

Ibrahim explained that NDIC’s determination to extend deposit insurance protection to non-interest (Islamic) banks was in line with its statutory mandate and CBN’s new bank licensing regime. He declared: “NDIC believes that non-interest (Islamic) banks should enjoy the benefits of deposit insurance protection right from the day they are licensed.

“We therefore thought it fit at this crucial moment to design a Non-interest (Islamic) Deposit Insurance Scheme (NIDIS) in view of the realisation that non-interest banks will be involved in deposit-taking whenever they are licensed.”

Ibrahim explained that the seminar was one of the several initiatives by the corporation to prepare its staff and other stakeholders for the successful implementation of NIDIS in Nigeria.

He said the corporation had prepared a draft framework for the implementation of NIDIS in the country and had forwarded a consultative paper to stakeholders for comments. Dr Hassan Adamu, NDIC’s Board Chairman, said the seminar indicated that the regulatory authorities were determined to leverage on the current reforms of the financial system to introduce NIDIS to the country.

He noted that NIDIS was usually instituted to protect liabilities of depositors against loss of their deposits lodged with non-interest (Islamic) banks in the event of failure of such banks. Adamu, represented by Alhaji Aliu Abdulrahman, a board member, commended the corporation’s efforts and expressed the hope that the objectives of the seminar would be realised.

Mrs Nkechi Nwogu, Chairman, Senate Committee on Banking, described the introduction of the non-interest (Islamic) bank as a noble idea. She said the non-interest (Islamic) bank had contributed to the growth of some of the developed economies in the world. She urged participants to make effective contributions that would help improve financial service provision in the country.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.