Central Bank of Nigeria to Establish Regulatory Council for Islamic Finance
Tuesday, February 24, 2015
The CBN said, “An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the Central Bank to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.
“Section 9.1 of the CBN Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria provides for the establishment of an advisory body at the CBN on Islamic banking and finance. The body shall be called the Financial Regulation Advisory Council of Experts (FRACE). The Council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective regulation and supervision of NIFIs in Nigeria.”
Members of FRACE will be appointed for renewable two-year terms and the council will consist of 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.
To serve on FRACE, members will be required to possess knowledge, expertise and experience in the field of Islamic Jurisprudence with specialization in the field of Islamic Commercial Jurisprudence. They should also be able to demonstrate: knowledge in the philosophy of Islamic law; knowledge of written and spoken Arabic as well as English languages; and exposure in the field of business, economics or finance especially Islamic Finance.
Among its duties and responsibilities, the FRACE will be required to: