Jaiz Bank is a non-profit bank, otherwise known as Islamic bank, which has generated so much controversy in the polity, especially among the Christian community which fears that it could be a ploy to Islamise Nigeria. In this interview with Zainab Ahmed Maska, the chairman and co-founder of Jaiz Bank, Alhaji Umar Muttalab, clears the air on the operation of Islamic banking in the country.
There has been so much controversy over Islamic banking; what is the difference between conventional banking and Islamic banking?
The simple difference is that the conventional banking system charges interest, while Islamic banking does not. In other words, Islamic banking is a non-interest financial institution. Islamic banks deals in ethical transactions; they do not deal in transactions involving breweries and any other thing which runs contrary to the Islamic faith.
There has also been this fear among Nigerians, especially Christians, that the introduction of Islamic banking could be a ploy by some forces to Islamise Nigeria; what is your take on this?
Such fear is quite uncalled for. In Britain, there are five Islamic banks. I do not think that they have Islamatised Britain. There are Islamic banks in the United States of America (USA), Germany, Switzerland and in many countries of the world. And in all of these countries, the operation of Islamic banks has not given the people reason to fear religious domination. Those who are expressing such fear are only being sentimental and, perhaps, little or no knowledge of how Islamic banking system operates.
You only go to them if you need their services. It is not compulsory that you bank with them. If anyone is interested in their non-interest services, there is no harm in seeking such services. I do not think that the mere establishment of an Islamic bank can be a ploy to Islamatise the country.
Islamic Banks operate with the shares of both Muslims and Christians. Even the employees of the bank do not have to be Muslims before they can be offered a job in Islamic bank. Anyone can bring transaction once such transaction is ethical and, of course, does not go contrary to the principles and objectives of the bank. You only deal with them if you do not want to pay interest.
Who are the target customers of Jaiz bank?
The over 160 million Nigerian's living in the country are the target customers of Jaiz Bank. It is for every interested individual or group; it is not exclusively for Muslims or any religious group. It is for all Nigerians, of course, and Nigeria is ripe for Islamic banking system.
Would Jaiz Bank be operating as a regional bank? What is actually its mode of operation?
At the moment, Jaiz Bank is engaged in regional operation with higher concentration in the Northern part of the country. But we hope to go to the capital market to raise additional money, so that we can operate throughout the country, and we hope to do this in the nearest future.
Against the back drop that it is a non-interest bank,is it likely to stand the test of time?
Islamic banks have been operating in several countries of the world, and they have continued to flourish and grow stronger. I do not think that Jaiz Bank will be an exception. People have continued to patronize Islamic banks all over the world because of their ethical services and non-interest financial products they offer the public.
So if Jaiz Bank adheres to the principles and objectives establishing it, of course it will stand the test of time. Every organization has to start from somewhere; and that is exactly what we have done in the case of Jaiz Bank.
Can you briefly explain to us what plan Jaiz Bank has for ordinary Nigerians?
It's been more than 10 years now since we started working towards getting this bank to function in this country, by getting a certified licence which will then enable it to function in the parts of Nigeria like other banks do, and God Almighty has made it possible that, not more a year ago, it got its licence to operate.
I will also like to add this bank was not something we came up with newly, because it has for long been initiated by some developed countries of the world which have benefitted from it because this is a bank which does not charge you for interest.
Even if you take loan from them, you can only sit and discuss with the bank on the profit you assume you will make after conducting a business, certain percentage of the profit is then shared between the bank and the costumer.
You know, Nigeria imitates England since we got our independence from them, so even England does this kind of banking - and they even have more than five of this kind of bank in the UK - and this is because England wants to be initiator of the non-interest bank in the European countries and it also has the headquarters there in England, so that the European countries - just like the Arabs countries - are enjoying under the leadership of Saudi Arabia.
Even the Asians benefit under the guidance of Malaysia. This is one of our main reasons for bringing this to Nigeria so that its citizens can also benefit from it. Nobody will force you to bank Jaiz if you don't want to: if you feel we suit your need, fine, and if you don't, it's also fine and you can continue your banking with other banks that you feel you are more familiar with.
Jaiz Bank is like any other bank, only that it has some restrictions to the kind of business it conducts. For example, we don't indulge in any business that deals in terrorism - anything associated with it; we won't do any business that involves selling alcohol, pork or gambling and so on. We have special advisers for different purposes; we call them 'Religious Advisers' and we consult with them on every action before we take them.
They advise us on what religion permits and what it prohibits, and anything that the law does not permit we avoid it, and we also inform the Central Bank of Nigeria (CBN) about all our activities. In fact, they have a department that monitors that kind of issue.
Are non-Muslims allowed to use the bank's facilities, or is are they just for the use of Muslims?
This is a bank for the people of Nigeria; therefore, it is a bank for everyone regardless of religion of tribe. If you have any kind of business as long as it's lawful, we can conduct it with you; we do not discriminate or exempt anyone from doing business with us, and anyone interested in buying shares can do that. Also whether you are a Muslim or Christian, even our staffers do not necessary have to be all Muslims. The doors of opportunity are open for everyone, not just Muslims.
Does the bank only deal with big companies and individual business moguls, or does it also deal with low income salary earners?
Like I said earlier on, this bank is like any other bank: it interacts with everyone. When it comes to business, no one is exempted from using it; whoever wants to do business with us is welcome.
Have you been able to acquire some form of success here in Nigeria considering how the bank is being criticised by some people who call the bank 'Islamic Bank' and even go as far as saying no profit can be made since the bank does not accept interest?
It's true like you said: a lot of criticisms and some other things have been done and said, but now everyone knows that these were just mere assumptions and there was not even an element of truth in anything that was said. This is a bank where they are a minor number of Muslims, yet they have used it and have also succeeded in it.
Therefore, I am assuring you that we have succeeded because we started consulting businesses and we have successfully opened up about three branches, with the Headquarters in Abuja and the other two branches in Kano and Kaduna. By the Special Grace of God we will expand our branches to other parts of Nigeria with time and we will also continue to source for stakeholders to invest, because in order to open up more branches, we need more capital.
You said earlier that, in one year, you will be able to create 13 more branches, just when a court in Abuja has declared that the bank does not have a place in Nigeria; what's the true position?
No! That's not true, you see, what happened was that somebody who didn't get his facts right took us to court and, I think, there was already a plan for that which was just waiting to be set in motion; so it was announced to the press, but if the judge will check on all that has been, we will then go back to years back when the late Abdulkadir Ahmed was alive and, as the Governor of CBN, he gave the order to initiate the bank.
Secondly, CBN cannot initiate just anything; no, it has to conduct series of investigations and discuss with the Federal Government and also consult with professionals before it can come to a conclusion. As it is now, the court ended up confronting the accuser, saying he has no right whatsoever to take the bank to court.
If he had been able to present strong evidence, then CBN would have been force to shut down the bank, but unfortunately for the accuser he didn't have that . To top it all, we were not the Bank that was taken to court; it was CBN itself, and we will continue our banking without fear as the act does not affect us in any way.
The shares you are looking for, how much do you need to be able to obtain the licence you need to operate in the whole of Nigeria?
Like I mentioned in our previous event that took place last week, we need up to N8billion and by the grace of God when we get the money there will be enough to open up branches all over Nigeria.
And we are going to take it step by step because it's not easy, and you know that there are a lot of processes involved. It's not only about the money; there is the issue of hiring the staff that are up to the task and can discharge their duties very professionally for the bank to run smoothly.
You said you usually sit and discuss during consultation with your client about how profit will be shared; what if instead of profit there is loss, who will bear the loss?
During consultation we draw up an agreement. The same way profits are going to be shared is the loss will be shared also. Before we start any business, the client will have to deposit a certain amount which will serve as collateral even though the bank does not collect interest. Therefore, the bank and the client share, as part of that collateral will be used to pay people banking with us.
You have a reputation for building business or investment, and contributing to the development of many banks; will say your job at the Jaiz Bank is the most challenging?
Well yes, everyday my prayer always is for me to wake up one morning to find out this bank has reached every part of Nigeria and is well developed. I have for a long very time been serving banks like this, for example UBA and First Bank of Nigeria, but they are not what I'm focusing on right now.
We are hoping to continue to educate Nigerians on the advantage and value of this bank so that they can know that, at least, they have something to be proud of. And I know that we have so many people who don't like banking with a bank that collects interest, so since this has been created, they can save their money in it instead of the clay pots and under beds in their houses.
They should bring it to the bank so that it can be used to conduct business or develop something instead of just keeping it. This is the kind of bank they have been waiting for. I can tell you that this job at Jaiz is one of my greatest achievements.