Islamic Banking Licensing Controversy, Legality Question and Recent Reforms in Nigeria

Abstract

This paper examines Islamic banking and non-interest banking generally in Nigeria and the relevant controversy, law, practice and recent reforms, with a view to elucidating its legality or otherwise and reforms. The doctrinal method adopted in the paper makes use of both primary and secondary materials. The paper finds out that Islamic banking or non-interest banking is neither unconstitutional nor unlawful in the country. The study is significant on both religious and economic grounds. In other words, it seeks to douse the flame of the tension or suspicion that might still exist along religious divides in the country because of the licensing of Islamic banking while emphasizing the socio-economic benefits thereof. Having exhibited the many benefits accruable from this non-conventional banking, it is recommended that there is the need to sustain and strengthen it. The need for a robust supervision and periodic training for the supervisors and the relevant judges is also advocated.