See more as CBN announces 3 tools for Islamic banks, expects full adoption

• The CBN has announced the rollout of 3 caller instruments specifically tailored for non-interest fiscal institutions
• The apex slope hopes that the caller bank’s broader strategy to fortify the adoption and operational ratio of non-interest banking
• There are 3 fully-fledged Islamic banks and 2 accepted banks operating Islamic banking options

Legit.ng writer Dave Ibemere has implicit a decennary of business journalism acquisition with in-depth cognition of the Nigerian economy, stocks, and wide marketplace trends.

The Central Bank of Nigeria has introduced a acceptable of caller liquidity absorption instruments to enactment non-interest fiscal institutions, also known arsenic Islamic banks.

This was disclosed successful a circular dated May 23, 2025, released connected the apex slope website.

According to the circular, the latest tools are portion of the apex bank’s broader strategy to fortify deepening marketplace information and strengthen Islamic concern instruments crossed the country’s fiscal system.

CBN moves to amended the adoption of non-interest banks successful Nigeria. Photo credit: CBN
Source: Getty Images

CBN propulsion for much adoption of non-interest banking

The instruments unveiled by the Central Bank see the Nigerian Non-Interest Financial Institutions’ Master Repurchase Agreement (NNMRA), the CBN Non-Interest Asset Backed Securities (CNi-ABS), and the CBN Non-Interest Note (CNIN).

The CBN said the caller tools are designed to standardise marketplace practices, boost participation, and align Nigeria’s Islamic concern scenery with planetary standards.

Part of the circular reads:

"The Nigerian Non-Interest Financial Institutions’ Master Repurchase Agreement is simply a contractual model that aims to modulate and standardise the behaviour of repurchase (repo) transactions wrong the non-interest banking space."

Breakdown of the caller tools introduced by the CBN

According to the CBN, the statement is designed to connection a broad and globally accepted model that intelligibly outlines the roles and responsibilities of each counterparties, including the Central Bank itself.

The slope stated:

“This model is indispensable to instil assurance successful non-interest repo operations and to supply a robust level that encourages broader participation."

In addition, the Central Bank rolled retired the CBN Non-Interest Note (CNIN), an interest-free indebtedness statement betwixt eligible fiscal institutions and the CBN.

Jaiz Bank has been astatine the forefront of non-interest banking successful Nigeria. Photo credit: Jaiz
Source: UGC

The CNIN provides an alternate transmission for managing liquidity done scheduled auctions and is designed to complement the existing scope of non-interest fiscal instruments. It besides offers greater flexibility for institutions seeking short-term liquidity enactment wrong a Shariah-compliant framework.

The CBN explained:

“The CNIN is not lone a compliance-friendly instrumentality but besides a strategical instrumentality to broaden entree to non-interest liquidity solutions.”

BusinessDay reports that marketplace participants person been urged to notation to the Revised Guidelines for the Operation of Non-Interest Financial Institutions’ Instruments by the Central Bank of Nigeria, 2022, for elaborate accusation connected the operational procedures and regulatory requirements tied to these instruments.

The CBN besides called connected each eligible and authorised participants to proactively incorporated the caller tools into their liquidity absorption strategies.

All you request to cognize astir Islamic banking

Earlier, Legit.ng reported that the Central Bank of Nigeria approved the cognition of the Islamic banking exemplary successful the state with five licensed to service Nigerians

The banks are chiseled from accepted commercialized banks arsenic they connection interest-free loans to MSMEs and individuals.

Jaiz Bank was the pioneer of this banking attack successful Nigeria, providing customers with the accidental to gain profits from their savings.

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Source: Legit.ng