Non-Interest Banking System In Nigerian: Shari‘ah Perspectives

By Dr. Huud Shittu Ph.D

ABSTRACT

Endless queues and congestion, wary and unsympathetic cashiers, ineffective Automatic Transaction Machine (ATM) and other inconveniences are the major traits of the Nigerian Banks resulting to dilly-dally economy of Nigeria. Exploitation and economic corruption in the blood stream of Nigeria citizenry worsen economic responses. This altogether precipitates, recently, the apex Bank in Nigeria to announce its determination to float non-interest banking. This proposal has indeed grouped Nigerian Societies into two based on religions: Islãm and Christianity; it influences responses of stakeholders towards changing Nigeria to an Islamic country while others welcome the step because their religion accepts it. Some Nigerians have not believed that Sharĩ‘ah has its system of banking. This work, therefore, is not examining the position of stakeholders but it brings to the fore the concept of non-interest banking as it relates to Sharĩ‘ah perspective. Two methods are used: historical and survey. Secondary sources are used in establishing historical data. The paper further examines the objectives of the non-interest banking system. How would Islamic banking work to benefit every customer irrespective of religious background? Against this background, this paper has reviewed extant works and examined what constitute Islamic banking? It surveys some countries where pilot projects on Islamic banking system were carried out and subsequently substantiated. Major features of Islamic banking are highlighted; the policies and modes of trading within and outside the Bank are also explained. Benefits that could be derived from Islamic banking are comprehensively stated. The paper puts together all the salient points as summary, recommendation and conclusion.