CBN, Regulation Advisors Deepen Governance Framework For Non-interest Financial Institutions

 

The Central Bank of Nigeria (CBN) has reaffirmed its commitment to strengthening Shariah governance, regulatory clarity, and risk management in the non-interest financial services industry as part of efforts to sustain public confidence, financial stability, and the orderly growth of the sub-sector.

The commitment was restated at the 2nd annual interactive session between the CBN Financial Regulation Advisory Council of Experts (FRACE) and the Advisory Committees of Experts (ACE) of Non-Interest Financial Institutions, held on Thursday, May 7, 2026, at the CBN auditorium.

In a welcome address delivered on behalf of the deputy governor, Philip Ikeazor, the director of the financial policy and regulation department, Dr Rita Ijeoma Sike, described the session as a strategic platform for deepening the credibility, resilience, and soundness of the non-interest financial services industry.

Ikeazor noted that the engagement builds on the foundation laid during the inaugural session and reinforces the Bank’s strong commitment to sustaining a sound, credible, and resilient non-interest financial system anchored on robust governance, effective compliance, and prudent risk management.

He emphasised that non-interest financial institutions continue to play an increasingly strategic role in Nigeria’s financial system by providing ethical and Shariah-compliant alternatives to conventional finance, while contributing meaningfully to financial inclusion, real sector financing, MSME development, and shared prosperity.

The deputy governor, however, observed that as the industry grows in size, sophistication, and interconnectedness, it faces unique risks, particularly non-compliance risk, governance challenges, operational vulnerabilities, and emerging technological risks. He warned that such risks, if not properly managed, could undermine public confidence, financial stability, and the overall credibility of the non-interest finance ecosystem.

He explained that the establishment of FRACE and the mandatory constitution of ACEs in every NIFI were designed to institutionalise an effective, harmonised, and resilient governance framework across the industry. He added that sustained interaction between FRACE and ACE remains central to ensuring that regulatory expectations are clearly understood and consistently applied.

“The objectives of today’s session include fostering the institutionalisation and effective operation of a robust Shariah governance system within Non-Interest Financial Institutions, and providing a structured platform for dialogue, knowledge-sharing, and collaboration” he stated.

In his opening remarks, the deputy chairman of FRACE, Prof. Bashir Aliyu Umar, stressed that the interactive session was aimed at strengthening governance in the sub-sector and providing a platform for positive and constructive engagement between the CBN FRACE and the ACEs of NIFIs.