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Thursday, June 30, 2011

NOW THAT JAIZ BANK HAS THE GREEN LIGHT


      The name Jaiz has become synonyms with non interest banking in Nigeria, starting from 2002 when the process for the creation of Jaiz bank gathered momentum 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 Islamic banks to take that long. But Jaiz bank is not the first institution proposed as Islamic Bank, before it there were many attempts, starting with WAPA (West African Pilgrimage Agency) of the colonial era. WAPA was established to cater for the financial arrangements of Muslim pilgrimage, a name that is still common in places like Kano. Others includes Habib Bank and numerous community and later micro finance Banks established for the same purpose. What make Jaiz bank unique is the scale of the project and the hope placed 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 shares in 2003, the Bank was able to raise the minimum requirement for establishment of commercial bank in Nigeria (as at then it was 2.5 billions Naira and the bank raised over 3 billions Naira). Immediately after that 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 the CBN directive little was heard about Jaiz, the few attempts made by its organizing management to raise the new minimum capital never see the light of the day. This included looking for foreign investors and other 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 non executive board members are known to have accumulated wealth they can use to invest in the bank. The board should not left any stone unturned, in order to ensure that the Islamic bank generated the required capital base. Another thing is the recruitment for professional hands to come and run the affairs of the bank. This should not be taken lightly because it is the same people that will command the bank and moved it in the desired direction so as to make the difference it is expected to make. Information and communication technology (like in the conventional banking) is a strategic factor as Jaiz bank can not attain the desire impacts across the country without massive investment in ICT. The bank should also collaborate and develop links with foreign Banks in the business, so as to benefit from their experiences. As an Islamic bank, the management of Jaiz should followed laid down procedures required of 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 about the controversies on the introduction of Islamic banking in Nigeria. Vested interests who out of their own agenda or ignorance have already started actions to ensure that Islamic Banking do not see the light of the day. Sanusi himself has to be careful because some of these anti Islamic banking moves are coming from his personal enemies who may not necessarily be anti Islamic banking, but doing that in order to prostrate any good work he want to achieve in order to settle old scores. Those opposed to Islamic Banking might be doing what they do because of Islamiphobia that becloud their faculties of reasoning. Wonder never end, in a world of knowledge and progress (when the Western world itself has become opened to Islamic banking) some people here in Nigeria want to play the religion card in order to put obstacles in the way of this genuine effort. At a time when the United States authorities have established special adviser on Islamic Banking, the United Kingdom, Japan, Singapore, India and Russia are lunching their own Islamic bond (Sukuk), the city of London is on the way 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 put forward by these groups, that Islamic bank will temper with the secularity of Nigeria is baseless 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 country to move forward. With the green light, I hope more non interest Islamic banks will come on-board including those from other religions.