This Day (Lagos)

Nigeria: Court Declares Islamic Bank Illegal

Abuja — ... Refuses to nullify Jaiz International Bank's licence

A Federal High Court in Abuja yesterday 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 the action, he would have nullified the licence issued to Jaiz International Bank PLC to carry out Islamic banking in the country.

He said: "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 Sanusi Lamido Sanusi 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 the 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 BOFIA 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".

Ogboji, a legal practitioner asked the court to hold that the CBN's guidelines for the regulation and supervision of institution offering non-interest financial services in Nigeria under Islamic commercial jurisprudence is ultra vires, illegal, null and void.

But the CBN and its governor had asked the court to dismiss the suit on the grounds that the plaintiff had failed to disclose how the license and issuance of the guidelines had adversely affected him.

He cited Section 10 of the constitution which says government should not adopt any religion.

"CBN does not have the power to designate Islamic Bank as specialize bank", Justice Kolawole held.

Ads by Google

Copyright © 2012 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.