ABUJA – The Central Bank of Nigeria (CBN) has reaffirmed its commitment to
strengthening Shariah governance, regulatory clarity, and risk management in the
non-interest financial services industry as part of efforts to sustain public confidence,
financial stability, and the orderly growth of the sub-sector.
The commitment was restated at the 2nd Annual Interactive Session between the
CBN Financial Regulation Advisory Council of Experts (FRACE) and the Advisory
Committees of Experts (ACE) of Non-Interest Financial Institutions, held on
Thursday, May 7, 2026, at the CBN Auditorium.
In a welcome address delivered on behalf of the Deputy Governor, Financial System
Stability, Mr. Philip Ikeazor, the Director, Financial Policy and Regulation Department,
Dr. Rita Ijeoma Sike, described the session as a strategic platform for deepening the
credibility, resilience, and soundness of the non-interest financial services industry.
Mr. Ikeazor noted that the engagement builds on the foundation laid during the
inaugural session and reinforces the Bank’s strong commitment to sustaining a
sound, credible, and resilient non-interest financial system anchored on robust
governance, effective compliance, and prudent risk management.
He emphasised that Non-Interest Financial Institutions (NIFIs) continue to play an
increasingly strategic role in Nigeria’s financial system by providing ethical and
Shariah-compliant alternatives to conventional finance, while contributing
meaningfully to financial inclusion, real sector financing, MSME development, and
shared prosperity.
The Deputy Governor, however, observed that as the industry grows in size,
sophistication, and interconnectedness, it faces unique risks, particularly non-
compliance risk, governance challenges, operational vulnerabilities, and emerging
technological risks. He warned that such risks, if not properly managed, could
undermine public confidence, financial stability, and the overall credibility of the non-
interest finance ecosystem.
He explained that the establishment of FRACE and the mandatory constitution of
ACEs in every NIFI were designed to institutionalise an effective, harmonised, and
resilient governance framework across the industry. He added that sustained
interaction between FRACE and ACE remains central to ensuring that regulatory
expectations are clearly understood and consistently applied.
“The objectives of today’s session include fostering the institutionalisation and
effective operation of a robust Shariah governance system within Non-Interest
Financial Institutions, and providing a structured platform for dialogue, knowledge-
sharing, and collaboration” he stated.
In his opening remarks, the Deputy Chairman of FRACE, Prof. Bashir Aliyu Umar,
stressed that the interactive session was aimed at strengthening governance in the
sub-sector and providing a platform for positive and constructive engagement
between the CBN FRACE and the ACEs of NIFIs. He commended the CBN
Management for reviving the interactive session, which was first instituted in 2014.
Earlier, in her welcome remarks, Dr. Rita Ijeoma Sike, Director, Financial Policy and
Regulation Department, reaffirmed the Bank’s commitment to fostering a strong,
credible, and well-governed non-interest financial services industry.
She noted that the growing diversity of products, institutions, and delivery channels
particularly with the emergence of Islamic fintech, underscores the need for
continuous dialogue, sound regulatory oversight, and robust advisory input from
scholars and practitioners.
The session featured two technical presentations. The first, delivered by Prof. Bashir
Aliyu Umar, was titled “Shariah Non-Compliance Risk in Non-Interest Banks and its
Impact on the Non-Interest Financial Services Industry.” The second presentation, on
“Islamic Fintech and Financial Inclusion,” was delivered by Muhammad Kabir
Muhammad and Mustapha Ishaq.
A major highlight of the programme was the interactive session between FRACE and
ACE members, which allowed for frank discussions on practical challenges, capacity
building, independence of ACEs, risk mitigation strategies, and measures for
enhancing governance and innovation in the sub-sector.
In his closing remarks and vote of thanks, Prof. Abdul-Razzaq Alaro, a member of
FRACE, commended participants for their active engagement and expressed
appreciation to the CBN for convening the session. He urged stakeholders to take
concrete steps towards implementing the resolutions and outcomes of the
engagement, noting that the value of the session would ultimately be measured by
the practical improvements recorded across the subsector.
FRACE serves as a bridge between conventional financial regulation and specialised
faith-based financial practices by promoting consistency, credibility and investor
confidence in Nigeria’s non-interest finance sector. Through its advisory role, it
supports standardised interpretations, assists the CBN on complex regulatory
issues, and contributes to ensuring that non-interest financial activities are legally
regulated, ethically grounded and properly aligned with applicable principles.
Similarly, the ACEs perform corresponding advisory and oversight functions at the
institutional level within NIFIs.
The 2nd Annual FRACE–ACE Interactive Session brought together members of
FRACE, Chairmen and members of various ACEs, Managing Directors of Non-
Interest Banks, senior CBN officials, and other key stakeholders including
representatives of the Bank of Industry and the Securities and Exchange
Commission.
