A REFLECTION ON THE SOCIO-LEGAL PERSPECTIVES OF ISLAMC BANKIN IN NIGERIA
Abstract
The introduction of Islamic banking model into the Nigeria banking sector by the Central Bank of Nigeria had generated a lot of controversies and will continue to be a source of concern for a very long time. The grouse of people at the time material was due to the close linkage between Islamic banking practice and the Islamic religion ethical value on charging of interest in financial transactions. The argument of people, in reaction to Islamic banking, among others was that it is a clever attempt to Islamise the country. This position appeared justified due to utterances from Muslim Scholars, Clerics and coupled with sudden incursion of Boko Haram in the Northern part of Nigeria. With deep reflection on the close relationship between Islamic banking system and Islamic religion and perceptions of traditional as well as Christian religions on charging interest in financial transactions; this paper examines various issues raised by people consequent to the introduction of Islamic banking into the Nigerian banking sector. To shed light on the practices of Islamic banking, the paper discusses the evolution and various principles characterising Islamic banking system, the challenges and prospects inherent in the system, the statutory and constitutional frameworks for the operation of the system in Nigeria. To justify the introduction of Islamic banking in Nigeria, the paper highlights positions of Christian and traditional religions on charging of interest in financial transactions. In conclusion, the paper advocates mutual understanding for the continued existence of Islamic Banking model in Nigeria.
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