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Thursday, June 30, 2011

NOW THAT JAIZ HAS BEEN GIVEN THE GREEN LIGHT

The name Jaiz has become synonyms with non interest banking in Nigeria, starting from 2002 when the movement for the creation of Jaiz gathered momentous to the past few weeks when the Central Bank of Nigeria finally gave the management of the Bank the go ahead to commence operation, it has taken nearly a decade to establish the bank making it one of the few to take that long. But Jaiz is not the first institution that was proposed as Islamic Bank before it there were many attempts, starting with WAPA (West African Pilgrimage Agency) of the colonial era. That was established to cater for the financial arrangements of Muslim pilgrimage, a name that is still common in places like Kano; to Habib Bank and numerous community and later micro finance Banks established for the same purpose. What make Jaiz unique is the scale of the project and the hope that is place on the institution by millions of people among them ordinary investors who put their hard earn savings in the institution. At the end of the first public offering of the bank in 2003 when the Bank was able to raised the minimum requirement for the establishment of commercial bank in Nigeria (then it was 2.5 billions and the bank raised over 3 billions) there were jubilations across the wide and breadth of this nation, particularly by people who share in the dream of it founders. That jubilation was cut short when the new CBN governor Charles Soludo came with his controversial baking sector consolidation that required banks to increase their minimum capital from 2.5 Billion to 25 Billion Naira.
        Since that CBN directive little was heard about Jaiz, the few moves made by it organizers to raise the new minimum capital never see the light of the day, this included looking for foreign investors and multilateral corporations to come and invest in the Bank. Now with the new green light, what necessary actions and directives should the management of Jaiz take in order not to waste this opportunity; some of its board members are known to have accumulated a lot of wealth that they can use part of it to invest in the bank, this very board should not left any stone unturned in order to ensure that this Islamic bank generated the new required capital base. Another thing is the recruitment of professional hands to come and run the affairs of the bank, this should not be taken lightly because it is these people that will command the bank in the desired direction in order to make the difference it is expected to make. Information and communication technology like in the conventional banking is also a strategic factor as Jaiz can never attain it desire impact across the country without making massive investment in this sector. The bank should also develop the desired collaboration and links with foreign Banks who have been in the business for quite long, so as to benefit from their experiences. As an Islamic bank the management of Jaiz should make sure that they followed the laid down procedure required for any Islamic Bank, this include among others not dealing in any interest related transactions and avoidance of speculative activities and gambling.  
        In the final note, the last may not be heard concerning the controversy on the introduction of Islamic banking into Nigeria. Some vested interest who out of their own agenda or ignorance have already started moves to ensure that Islamic Banking do not see the light of the day. Sanusi Lamido himself have to watch out because some of these moves are coming from his personal enemies who may not necessarily be anti Islamic banking, but to prostrate any good work that he wanted to achieved in order to settle previous scores. But some among these groups oppose to Islamic Banking are doing so because of Islamiphobia that continue to becloud their faculty of reasoning. Wonder never end, in a world of knowledge and progress when the western world itself has for long accepted Islamic banking as their own, some people in Nigeria still want to play the religious card in order to put obstacles in the way of this genuine movement. At a time when the United States authorities have special adviser on Islamic Banking, the United Kingdom, Japan, Singapore, India and Russia are lunching their own Islamic bond (Sukuk), while the city of London is on the road to become the third biggest global center for Islamic finance, we are here in Nigeria debating the benefit or other wise of Islamic banking. The argument been put forward by those behind these moves that Islamic bank will temper with the secularity of Nigeria will not hold water because countries like Russia, United States, UK and Turkey that embrace the same Islamic finance are more secular than Nigeria. My prayer is that those oppose to Islamic banking shall come to see the wisdom and benefits behind the introduction of Islamic Banking and put aside sentiment, personal grudges and religious differences, in order for our beloved country to move forward. With this new green light, I hope more non interest banks will come upstream include those from other religious background.

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