Lagos - The Nigerian unit of South African lender Standard Bank Group [JSE:SBK] has won approval to set up an Islamic banking arm, Central Bank governor Lamido Sanusi said on Monday.
Sanusi told Reuters in March he wanted to establish Nigeria as the African hub for Islamic banking and was working on a regulatory framework to emulate the success of the industry in Malaysia.
He said Stanbic IBTC Bank had six months to comply with the approval terms.
Islamic banking products, which are sharia compliant, do not charge interest on financing. Profits or losses are instead shared with the borrower, meaning they discourage unnecessary speculation and spread risk.
Sanusi has said he was looking at Islamic finance as a way of diversifying the country’s financial system and was planning to issue the first sovereign sukuk within the next 18 months.
Sanusi told Reuters in March he wanted to establish Nigeria as the African hub for Islamic banking and was working on a regulatory framework to emulate the success of the industry in Malaysia.
He said Stanbic IBTC Bank had six months to comply with the approval terms.
Islamic banking products, which are sharia compliant, do not charge interest on financing. Profits or losses are instead shared with the borrower, meaning they discourage unnecessary speculation and spread risk.
Sanusi has said he was looking at Islamic finance as a way of diversifying the country’s financial system and was planning to issue the first sovereign sukuk within the next 18 months.