{"id":8366,"date":"2026-05-12T12:02:03","date_gmt":"2026-05-12T12:02:03","guid":{"rendered":"https:\/\/ograsset.com\/?p=8366"},"modified":"2026-05-12T12:02:04","modified_gmt":"2026-05-12T12:02:04","slug":"cbn-cautions-non-interest-banks-on-governance-weaknesses","status":"publish","type":"post","link":"https:\/\/ograsset.com\/index.php\/2026\/05\/12\/cbn-cautions-non-interest-banks-on-governance-weaknesses\/","title":{"rendered":"CBN cautions non-interest banks on governance weaknesses"},"content":{"rendered":"\n
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CBN cautions non-interest banks on governance weaknesses<\/strong><\/p>\n\n\n\n

The Central Bank of Nigeria has warned non-interest financial institutions against governance and compliance risks capable of undermining public confidence and financial stability in the country\u2019s growing Islamic finance sector.<\/p>\n\n\n\n

The warning was contained in a press statement issued by the apex bank on Monday following the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts and the Advisory Committees of Experts of Non-Interest Financial Institutions held at the CBN Auditorium in Abuja.<\/p>\n\n\n\n

Speaking through the Director of the Financial Policy and Regulation Department, Dr Rita Sike, the Deputy Governor, Financial System Stability, Philip Ikeazor, said the rapid expansion of the industry had increased exposure to operational and regulatory vulnerabilities.<\/p>\n\n\n\n

The statement read, \u201cThe 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.<\/p>\n\n\n\n

\u201cHe warned that such risks, if not properly managed, could undermine public confidence, financial stability, and the overall credibility of the non-interest finance ecosystem.\u201d<\/p>\n\n\n\n

According to the CBN, the engagement was part of ongoing efforts to strengthen Shariah governance, improve regulatory clarity, and reinforce risk management standards within the non-interest financial services industry.<\/p>\n\n\n\n

The apex bank noted that non-interest financial institutions continued to play an increasingly important role in Nigeria\u2019s financial system by providing ethical and Shariah-compliant alternatives to conventional banking.<\/p>\n\n\n\n

It stated that the institutions were also contributing to financial inclusion, real sector financing, micro, small, and medium enterprises development, and shared prosperity.<\/p>\n\n\n\n

The CBN further explained that the establishment of FRACE and the mandatory constitution of ACEs across all non-interest financial institutions were designed to institutionalise a harmonised governance framework for the sector.<\/p>\n\n\n\n

According to the statement, sustained interaction between FRACE and ACEs remained critical to ensuring that regulatory expectations were properly understood and consistently implemented across the industry.<\/p>\n\n\n\n

\u201cThe objectives of today\u2019s 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,\u201d Ikeazor was quoted in the statement.<\/p>\n\n\n\n

In his remarks, the Deputy Chairman of FRACE, Prof Bashir Umar, said the interactive session was aimed at strengthening governance within the non-interest finance sub-sector and promoting constructive engagement between regulators and industry advisory committees.<\/p>\n\n\n\n

He also commended the management of the CBN for reviving the session, which was first introduced in 2014.<\/p>\n\n\n\n

Earlier in her welcome remarks, Sike reaffirmed the apex bank\u2019s commitment to building a strong and well-governed non-interest financial services industry.<\/p>\n\n\n\n

Source:<\/em>https:\/\/punchng.com\/cbn-cautions-non-interest-banks-on-governance-weaknesses\/<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

CBN cautions non-interest banks on governance weaknesses The Central Bank of Nigeria has warned non-interest financial institutions against governance and compliance risks capable of undermining public confidence and financial stability in the country\u2019s growing Islamic finance sector. The warning was contained in a press statement issued by the apex bank on Monday following the 2nd… <\/p>\n

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