The Central Bank of Nigeria has pledged to strengthen Shariah governance, regulatory clarity, and risk management in the non-interest financial services sector to sustain public confidence and financial stability.
The commitment was made at the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts (FRACE) and Advisory Committees of Experts (ACE) of Non-Interest Financial Institutions recently, at the CBN Auditorium.
Speaking on behalf of Deputy Governor for Financial System Stability Philip Ikeazor, Director of Financial Policy and Regulation Dr. Rita Ijeoma Sike said the session was a platform to deepen the credibility, resilience, and soundness of the sector.
He said non-interest financial institutions play a growing role in Nigeria’s financial system by offering ethical, Shariah-compliant alternatives and supporting financial inclusion, real sector financing, and MSME development.
He warned that as the industry grows, it faces unique risks including non-compliance, governance gaps, operational vulnerabilities, and emerging tech risks. If not managed, he said, these could undermine public trust and stability.
FRACE and the mandatory ACEs in every NIFI were set up to institutionalise a harmonised governance framework, he said. Sustained interaction between both bodies is key to ensuring regulatory expectations are understood and applied consistently.
“The objectives include fostering a robust Shariah governance system and providing a platform for dialogue, knowledge-sharing, and collaboration,” Ikeazor stated.
FRACE Deputy Chairman Prof. Bashir Aliyu Umar said the session aimed to strengthen governance and provide constructive engagement between the council and ACEs. He commended the CBN for reviving the forum first held in 2014.
Dr. Sike added that the rise of diverse products, institutions, and channels, including Islamic fintech, makes continuous dialogue and sound regulatory oversight essential.
The session featured presentations on “Shariah Non-Compliance Risk in Non-Interest Banks” by Prof. Umar, and “Islamic Fintech and Financial Inclusion” by Muhammad Kabir Muhammad and Mustapha Ishaq.
A closed-door session allowed FRACE and ACE members to discuss practical challenges, capacity building, ACE independence, risk mitigation, and ways to improve governance and innovation.
Prof. Abdul-Razzaq Alaro, FRACE member, urged stakeholders to act on the session’s resolutions, saying its value would be measured by improvements across the sector.
FRACE bridges conventional regulation and faith-based finance by promoting consistency, credibility, and investor confidence. ACEs perform similar advisory and oversight functions within NIFIs.