Islamic banking growing rapidly globally, says CBN

THE Central Bank of Nigeria (CBN) tried to justify its push for the introduction of Islamic banking in Nigeria, over the weekend, in Yola, where it described the non interest banking as the fastest growing  model in the world.

The apex bank governor’s Special Adviser, Dr. Bashir Umar, who was in Yola, at the weekend, said their balance sheet now reads one trillion dollar, with expected rise to four trillion by 2015.

The head of Non- Interest Banking (NIB), Keystone bank, Lagos, Abubakar Sadiq Abdulkarim at a seminar organized by the Central Bank of Nigeria (CBN) in Yola, Adamawa state last week, said the balance sheet came from 300 branches of the bank in the world.

“At present, there are over 300 Islamic banks that are operational throughout the world”, said Abdukarim.

Still growing yearly from 15 to 20 per cent, Abdulkarim stated that rapid development in the Islamic banking industry has largely accounted for this growth.

According to Abdulkarim, the source and application of funds in Non-Interest Banking provided another alternative to Conventional system of banking of offering product and services.

Also speaking at the seminar, Head, Investments and Research, Lotus Capital Limited, Taofiq Agbaje, described Islamic banking and finance as one of the fastest growing segment of the financial service industry. The service he said, was being offered in over 75 countries by over 435 institutions that managed almost  $1trillion as at 2010.

According to Agbaje, more countries are expected to intensify Islamic Finance Offering as New Islamic banks are opening in Kenya, Botswana, South Africa and a handful of others.

“Shari’ah compliant assets to account for approximately 2.5 per cent of global banking assets. The Islamic banking and finance industry is growing more than 20 per cent per year,” he said.

Sharing experiences of Islamic finance in Europe, Executive Board Member, Islamic Finance Council, United Kingdom, Omar Shaikh, said that UK has successfully built its Islamic finance within a secular framework.

Shaik explained that   there have been success in attracting billions of pounds in Foreign Direct Investment due to government engaging and being proactive to see its as an economic structured product (akin to asset based financing), not a religious issue.

SOURCE: Guardian Newspaper, 4 October 2011.http://www.ngrguardiannews.com/