(De)legitimising I-banks: the controversy over Islamic banking in contemporary Nigeria

Abstract

Since the Central Bank of Nigeria (CBN) published guidelines on the establishment and regulation of Islamic banking (I-banking) in Nigeria, differing sentiments have been offered to (de)legitimise this financial product. This paper therefore evaluates contending perspectives on the institutionalisation of I-banking in Nigeria. It argues that in spite of the globally acknowledged benefits of I-banking, the peculiar character of religiosity in Nigeria may render this financial product an instrument of conflict, and ultimately trivialise its anticipated advantages. Although some of the negative opinions against I-banking are informed by sectarian sentiments, the legal, constitutional and social arguments advanced by some of its antagonists seem persuasive. Consequently, the paper recommends some alternative options that will bring about a liberalised non-interest banking regime that reflects Nigeria's national peculiarities without necessarily compromising peace and unity.