Juliet Ezeh
In a bold move to safeguard Nigeria’s fast-growing non-interest financial sector, the Central Bank of Nigeria (CBN) has intensified efforts to strengthen governance, tackle emerging risks, and reinforce public trust in the system.
This renewed push was announced during the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts (FRACE) and Advisory Committees of Experts (ACE) of Non-Interest Financial Institutions (NIFIs), held on May 7, 2026, at the CBN Auditorium in Abuja.
The high-level meeting brought together key regulators, financial experts, and industry stakeholders to address pressing concerns surrounding the stability, compliance, and future growth of non-interest banking in Nigeria.
Representing the Deputy Governor for Financial System Stability, Mr. Philip Ikeazor, the Director of Financial Policy and Regulation Department, Dr. Rita Ijeoma Sike, described the session as a critical platform for strengthening the credibility and resilience of the non-interest financial services industry.
She noted that the engagement builds on earlier efforts to create a more transparent and accountable system capable of supporting sustainable economic growth.
According to the CBN, non-interest financial institutions are becoming increasingly important in Nigeria’s financial landscape, offering ethical and Shariah-compliant alternatives to conventional banking while supporting financial inclusion, small business development, and real sector financing.
However, the apex bank warned that the rapid growth of the sector has also exposed it to significant risks that could undermine its stability if not properly managed.
Among the major concerns raised were Shariah non-compliance, weak governance structures, operational vulnerabilities, and emerging technological threats linked to the rise of digital financial services.
“These risks, if left unchecked, could erode public confidence and threaten the credibility of the entire non-interest financial system,” the Deputy Governor warned.
To address these challenges, the CBN emphasized the importance of strong governance frameworks anchored on effective oversight, strict compliance, and proactive risk management.
The bank explained that the establishment of FRACE, alongside the mandatory creation of Advisory Committees of Experts in all non-interest financial institutions, was designed to ensure consistency and accountability across the sector.
It added that continuous engagement between FRACE and ACE remains essential in aligning regulatory expectations and ensuring uniform implementation of standards.
“The goal is to institutionalize a robust Shariah governance system and create a structured platform for collaboration, knowledge-sharing, and problem-solving,” the bank stated.
In his remarks, the Deputy Chairman of FRACE, Prof. Bashir Aliyu Umar, stressed that the interactive session was not just a routine gathering but a strategic effort to strengthen the foundation of the non-interest financial system.
He commended the CBN for reviving the engagement, noting that such dialogue is vital for improving transparency, building trust, and addressing industry challenges.
Also speaking, Dr. Rita Ijeoma Sike highlighted the growing complexity of the sector, particularly with the emergence of Islamic financial technology.
She explained that innovations in fintech are transforming the industry, creating new opportunities for financial inclusion while also introducing fresh regulatory and operational challenges.
“The diversity of products and delivery channels requires continuous oversight and expert input to ensure the system remains stable and credible,” she said.
The session featured technical presentations that provided deeper insights into the risks and opportunities within the sector.
One of the key presentations focused on the impact of Shariah non-compliance on the reputation and stability of non-interest banks, while another explored the role of Islamic fintech in expanding access to financial services across underserved communities.
A major highlight of the event was an interactive discussion session where participants openly examined real-world issues affecting the industry.
Stakeholders discussed practical challenges such as capacity building, strengthening the independence of advisory committees, improving risk management strategies, and fostering innovation without compromising regulatory standards.
The discussions underscored the urgent need for stronger collaboration between regulators and financial institutions to ensure sustainable growth.
In his closing remarks, Prof. Abdul-Razzaq Alaro praised participants for their contributions and urged stakeholders to move beyond discussions by implementing concrete reforms.
He stressed that the true success of the session would be measured by tangible improvements in governance, compliance, and overall performance across the sector.
The CBN reiterated that FRACE plays a crucial role in bridging the gap between conventional financial regulation and faith-based financial practices.
Through its advisory functions, the council helps ensure that non-interest financial activities are ethically grounded, legally compliant, and aligned with established principles.
Similarly, Advisory Committees of Experts within financial institutions are responsible for providing oversight at the operational level, ensuring adherence to regulatory standards.
The event attracted a wide range of participants, including managing directors of non-interest banks, senior officials of the Central Bank, and representatives from key financial institutions and regulatory bodies such as the Bank of Industry and the Securities and Exchange Commission.
As Nigeria continues to promote financial inclusion and diversify its banking system, the CBN’s latest move signals a strong commitment to building a transparent, stable, and trustworthy non-interest financial sector capable of supporting long-term national development.