By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Central Bank of Nigeria (CBN) on Friday unveiled guidelines on the governance of financial regulation advisory council of experts for non-interest (Islamic) financial institutions in Nigeria.
The CBN in a circular said “An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the Central Bank to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.”
According to the CBN, these will oversee Islamic banking and finance in the country in pursuant to Section 9.1 of the guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria. “The body shall be called the Financial Regulation Advisory Council of Experts (FRACE),” the CBN said.
The CBN says membership of FRACE shall be for a term of two (2) years, renewable subject to satisfactory performance.
“The FRACE shall comprise a minimum of five (5) members. The Special Adviser to the Governor on Non-Interest Banking shall be a member, while the Director, Financial Policy and Regulation Department shall serve as the Secretary,” the CBN added.
Some of the duties and responsibilities of the FRACE include giving expert opinion and assistance on non interest (Islamic) banking and finance matters referred to it by the CBN and other regulatory agencies in the Nigerian financial system, such as the Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM), National Pension Commission (PENCOM) and Debt Management Office (DMO).
Also the FRACE members are to endorse and validate application documents for new products and services, advert materials etc from NIFIs to ensure that they comply with the provisions of Islamic commercial jurisprudence.
In the same vein, FRACE members are to provide written juristic opinion of Islamic jurisprudence in respect of new non-interest (Islamic) financial products and instruments developed by the CBN or referred to it by the CBN or other regulatory bodies in the Nigerian financial system.
The CBN further affirmed that FRACE shall in the discharge of its duties, be guided by the principles of independence, competence, confidentiality and consistency as outlined in the Islamic Financial Services Board (IFSB) Standard on Guiding Principles of Shariah Governance Systems for Institutions Offering Islamic Financial Services (IFSB-10) and other relevant regulations.
CBN Unveils Guidelines for Islamic Finance Advisory Institutions in Nigeria
