A Federal High Court in Abuja declared the non-interest financial institution operating under the principles of Islamic jurisprudence as illegal and unconstitutional.
Justice Gabriel Kolawole held that had it not been that the plaintiff , Godwin Sunday Ogboji lacked the locus standi to institute this action, he would have nullified the licence issued to the Jaiz International Bank PLC to carry out Islamic banking in the country.
"There are no provisions in the CBN Act and the Banks provided for in the Banks and other financial institutions act (BOFIA) that empowers the CBN Governor SanusiLamidoSanusi to issue license for non-interest financial institution to operate under the principles of Islamic jurisprudence without the approval of the head of state through the minister of finance.
"Unlike other specialized banks, the Jaiz International Bank PLC can only be established in the country with the intervention of the National Assembly by amending the BOFI Act.
"If not that the plaintiff has no locus standi to maintain this action, I would have nullified the illegal license issued to the Jaiz International Bank PLC by the CBN to operate non-interest banking under the principles of Islamic jurisprudence.
"This case is hereby struck out for lack of locus standi, but the AGF should take steps to remedy the situation, and further ensure that the CBN carries out its duties within the provisions of the law establishing it".
But a Senior Advocate of Nigeria (SAN), Abubakar Malami in his reaction to the court ruling said that Islamic banking is legal.
The successive Nigerian constitutions have always preserved the inalienable fundamental human right to freedom of thought, conscience and religion.
Section 38 of the constitution gives the Nigerian muslims a very firm footing to demand for and establish Islamic banking.
It is indeed legal and inalienably bestowed by the constitution.
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Finally, our courts have come to their senses and realised that Nigeria is still a "SECULAR" State. Expressing ones fundamental human rights within the context of our constitution and democratic setting can be accomplished either individually or collectively without having to drag the government into a religious banking experiment. Secondly, the CBN Governor represents our institution of democracy and anytime he veers off outside this constitutional parameters under the guise of giving succour to a religious institution, he is in essence giving the general public the impression that his actions are sanctioned by the National Assembly. Mr. Sanusi lacks the constitutional mandate to either give donations on behalf of the CBN in the name of Nigeria (except when such gifts involve his personal donations), nor can he as someone representing a government institution make unauthorised public pronouncements on the behalf of the CBN without receiving the National Assembly approval. Simply put, Mr. Sanusi is a Civil Servant and not a politician, and cannot be seen to be making publicly binding statements without the consent of his employers - the Nigerian people.
The phrase "Islamic Banking" gives the impression that we are no-longer a "Secular State", and that Nigeria is run by some Religious Theocracy, a concept that is far from being correct. The decision by the Federal High Court is therefore, commendable. However, in a democracy such as ours, there are quite a few wealthy muslims who could set up any brand of banking they wish, without the backing of the Nigerian government. Every individual in a democracy is free to establish any form of financial services institutions they wish. The government can only provide regulatory guidelines for such entities, and such institutions must meet the required reserve ratio before taking off as a banking institution. Personally, I do not know how, in a highly competitive market how a bank can survive without having to charge interest for lending money out to customers. Sanusi's intent is to use this mechanism to re-distribute money to his kinfolks without regard to the cost of money. I had stated earlier in my commentaries on this subject that based on the government's contract with Australia to print the Naira, it costs the Nigerian Government 150 Billion Naira annually to accomplish this. This is obviously a cost borne by the Nigerian people. Now, I do not see how and where Mr. Sanusi can recover these costs if he should choose to distribute the naira under his Islamic Banking concept without having to charge interest on the money he gives out. However, as I have stated earlier, it would be quite okay by me if any muslim could set up this system as an individual without having to carry the Nigerian people along in this scheme. Good luck to anyone who dares to do this, and may they last long in their endeavours.
Avoiding transactions with interest, gambling, alcohol, exploitation, injustice, swine and all other products harmful to humanity is part pf worship to all true Muslims and that is guaranteed by Section 38 of the 1999 Constitution. Please mind your business for the sake of humanity in case you don't believe in the Qur'an,Bible or/and the Old testament.