By Yinka Kolawole

LAGOS — The Central Bank of Nigeria, CBN, has issued guidelines for an advisory body that will oversee Islamic banking in the country.

The advisory body, known as the Financial Regulation Advisory Council of Experts, FRACE, will be tasked with ensuring all banking products that are designated as Islamic conform to Sharia principles.

The guidelines set out minimum requirements for the advisory body, which will comprise a minimum of five members including a CBNofficial.

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 boards of Sharia finance experts, who are limited to serving in one institution at a time.

According to the CBN, “the guidelines have been developed and issued to guide the operations and activities of the FRACE. It sets out the membership, composition, qualification, duties and responsibilities of the FRACE among others.”

The apex bank further stated that the guidelines is to “set forth the composition of the FRACE and the minimum qualification of its members; define the duties and responsibilities of the council and its members; define the working relationship between the FRACE and the individual Advisory Committees of Experts (ACE) of NIFIs; and outline a code of conduct for members of the FRACE.

“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. It 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 knowledge, expertise and experience in the field of Islamic jurisprudence with specialization in the field of Islamic commercial jurisprudence.

“A member should also demonstrate knowledge in the philosophy of Islamic law; knowledge of written and spoken Arabic as well as English language; and exposure in the field of business, economics or finance especially Islamic finance.”

The CBN’s advisory body will be guided by the principles of Sharia governance issued by the Malaysia-based Islamic Financial Services Board.