Breaking News
Translate

‘Sanusi lacks power to issue licence for Islamic bank’

By Ikechukwu Nnochiri, Abuja

A Federal High Court in Abuja, yesterday, held that the Central Bank, CBN, Governor, Sanusi Lamido Sanusi, lacked the constitutional powers to issue license for the operation of a non interest bank under the Islamic commercial jurisprudence.

Delivering judgment in a suit that was filed by a lawyer, Mr Godwin Sunday, challenging the institutionalization of the Islamic banking system in the country by Sanusi, the court maintained that the action was in flagrant violation of section 10 of the 1999 Constitution as amended.

The court preisded over by Justice Gabriel Kolawole noted that in-line with the extant provisions of the Banks and Other Financial Institutions Act, BOFIA, Cap B2, Laws of Nigeria, 2004, the CBN governor, ought to have secured the nod of both the National Assembly and the Minister of Finance, before issuing license and guidelines for the operation of Islamic Bank in the country.

Lamido Sanusi, CBN governor

It however declined to revoke the license earlier issued to one Jaiz Bank International Plc to operate Islamic banking in the country on the premise that the plaintiff lacked the  locus-standi to institute the action.

The CBN, Sanusi, and the Attorney General of the Federation, AGF, who were joined as defendants in the matter, in their respective preliminary objections to the suit, insisted that Sanusi acted within his powers, but the court disagreed.
yesterday said he would have declared the operation of Jaiz Bank International Plc as illegal and nullify the license issued to it by Sanusi, assuming the bank was joined as a party to the suit.

Consequently, the court struck out the case of the plaintiff on grounds that he was bereft of the locus standi, though it warned that the CBN governor should “always act within the powers granted to him by the law.”

According to the judge, “a non interest bank operating under Islamic commercial jurisprudence cannot be created without a clear legislative intervention by the National Assembly. The CBN governor  lacks the statutory powers to establish a bank that operates under Islamic jurisprudence as a specialized financial institution. Such bank cannot even be smuggled in under section 66 of BOFIA.

“It is not a bank that can be decreed into existence by virtue of a mere guideline released by the the governor. More so, Section 51 of the CBN act empowers the CBN board to make or alter the rules of the apex bank, not the governor.

Meanwhile, Counsel to both the AGF,  Mr Aminu Sadauki, and Mr Adetola Kazim, SAN, had urged the court to dismiss the suit, contending that section 33(1b) of the CBN Act, 2007, gave Sanusi the powers to issue guideline for regulation of banking activities in Nigeria, without exclusion of Islamic commercial institutions.


Disclaimer

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