The restrictions were contained in a circular titled: “Framework for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria,” issued to all banks by CBN’s Financial Policy and Regulation Department and posted on its website.
The apex bank stated in the circular which encouraged conventional banks and other financial institutions operating in Nigeria to offer or sell Shariah-compliant products and services through subsidiaries, windows or branches only. It, however, warned that such non-interest subsidiaries or branches shall not be allowed to offer other non-Shariah compliant products or services on behalf of the parent conventional bank.
The CBN also directed that all transactions and exposures between a non-interest subsidiary of a conventional bank and other financial institutions and the parent bank shall be in accordance with Shariah principles and practices.
A Non-Interest Financial Institution (NIFI) can be said to be a bank or Other Financial Institution (OFI) under the purview of the CBN, which transacts banking business, engages in trading, investment and commercial activities as well as the provision of financial products and services in accordance with Shariah principles and rules of Islamic commercial jurisprudence.