CBN Raises Governance Alarm Over Non-Interest Banks Amid Rising Islamic Finance Growth in Nigeria
The Central Bank of Nigeria (CBN) has issued a fresh warning to non-interest financial institutions over growing governance and compliance weaknesses that could threaten confidence in the country’s expanding Islamic finance sector. The apex bank said the risks must be urgently addressed to safeguard financial stability.
The warning was delivered during the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts (FRACE) and the Advisory Committees of Experts (ACEs) of non-interest financial institutions, held in Abuja. The meeting brought together regulators, industry experts, and financial stakeholders.
Speaking through the Director of the Financial Policy and Regulation Department, Dr Rita Sike, Deputy Governor for Financial System Stability, Philip Ikeazor, said the rapid expansion of non-interest banking has exposed the sector to new operational and regulatory vulnerabilities. He warned that weak governance structures could undermine public trust.
According to the CBN, risks such as non-compliance, governance lapses, operational weaknesses, and emerging technological threats are becoming more pronounced as the industry grows in size and complexity. The bank stressed that if not properly managed, these risks could affect both financial stability and the credibility of the system.
The apex bank reaffirmed its commitment to strengthening Shariah governance, improving regulatory clarity, and enhancing risk management frameworks within the non-interest financial ecosystem. It also highlighted the growing role of Islamic finance in driving financial inclusion, MSME development, and ethical investment across Nigeria.
The session also featured discussions on Shariah non-compliance risks and the rising influence of Islamic fintech in expanding access to financial services. Participants agreed on the need for continuous engagement between regulators and industry operators to ensure stronger oversight and sustainable growth of the sector.
source: Punch