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Open Letter To CAN On Islamic Banking By Max Gbanite
At least there is in existence, an unequivocal fundamental agreement, and belief listed in the Hebrew holy book of ‘Torah’; in the Christian ‘Holy Bible’; and in Islam’s ‘Holy Koran’ that says that, ‘making profit on money’ or the act of ‘usury’ is against the teachings of almighty ‘Yahweh’ – ‘God’- ‘Allah’; depending on what terminology used by your religion.
God (my choice as a Catholic), showed that HE is the founder of ‘democracy’ and ‘choice’ before we even heard of such words. HE gave us the choice to be righteous and go to heaven or paradise; or be unrighteous and go to hell. HE never insisted that you adhere to any of His laws by force. HE allowed Christianity to emerge from Judaism; and from both religions allowed Islam to emerge; and HE allowed, so it seems, Christianity to fragment from universal Catholic Church to others like the Anglican, Methodist, Presbyterian, Pentecostals, and all other pseudo-Christian sectarians.
The urge to write this open letter to the leadership of Christian Association of Nigeria (CAN), is to douse their orchestrated effort to overheat the Nation; and cause disaffection between Christians and Muslims. I abhor the manner with which the current leadership of the organization under Pastor Ayo Oritsejafor, is misinforming followers on the issue of ‘non-interest’ banking.
The ideation of ‘non-interest’ banking as I said earlier started with the Hebrew religion; carried on under Christianity; and on ward with Islam. However, what happed is that the adherents of Islam, no matter which faction one belongs to; be it Sunni, Izallah, Sufi or even the dreaded fundamentalists amongst them; all have an undivided faith in Allah. For instance: during the fasting period of Ramadan Kareem, they join hands in fasting; and it is done at same period, with little or no variation in worship; and with a single minded focus on the words of Allah. They simply abducted Allah as theirs, and vowed to protect His words with their lives.
Therefore, it should not come as a surprise to anyone, if they decide to abduct the essence of ‘non-interest’ banking as Islamic, why not? After all, the religion preaches against ‘usury’ the same as other religions. They believe in that teaching since it came directly from Allah.
Compare to Christianity. Yes, we believe in God, especially in our Lord Jesus Christ as our saviour. However, only the Catholics, Anglicans, Methodists, Baptists, and Presbyterians observe the lent (fasting period) before Easter celebration. The rest choose a particular month of the year to fast. Whereas the Catholics, Anglicans, Methodists and Presbyterian profess the teaching of love, have the cross, a symbol of Christianity, adorned on their Altars; prays ‘Our Lord’s Prayer-Our Father’; the Pentecostals on the other hand talks less about love for one another, preach more about all sorts of miracles, wealth and riches; and hardly pray ‘Our Lord’s Prayer–Our Father’; and do not adorn crosses on their Altar walls.
Again, the Muslims don’t pay ‘tithe’ or make Church contributions. They encourage those whom Allah has blessed to do ‘sadaka’ help the poor; if there is a need to build or repair a mosque, those who can afford it do it without tasking members.
On the other hand, our Churches never forget to task members agonizingly about ‘tithe’, yet, the rich amongst us choose when it suits them to help the poor. Some of the Pentecostal Bishops insists on wife or son taking over command just to keep the enormous church’s wealth in family’s hand; some of them have aircrafts. Glory be to God, that all of us will still be buried in six-feet-deep graves without the aircrafts, because they will never fly into Heaven.
Within our Christianity, intra-religious challenges still exist. I can imagine the furor from my Parish Priest on hearing that my daughter is about to marry an Anglican; and the idea of her marrying a Pentecostal, could result to rustication from the Parish, and the same goes for other Christian sects.
But in Islam, they allow marriages between the various sectarians, the underlying factor is simple; and that is Islam.
I had to digress to expose the hidden hypocrisy within our CAN. What has ‘interest-free-banking’ got to do with Islamizing Nigeria? In 1986, IBB set up a seven man committee headed by former Senator John Shagaya (then a Lt. Col); the committee had 4 Christians and 3 Muslims. They were tasked to recommend if Nigeria should become a full member of Organization of Islamic Countries (OIC). After consultations, they recommended that the Nation join the organization. The daily times editorial wrote, “We regard the surreptitious admission of this country into the OIC as the greatest mistake of this administration. The action, more than anything else, tended to polarize the nation. Since the secularity of this nation is guaranteed in the constitution, that action should not have been taken the way it was taken.” (Excerpted from the book, ‘Prince of the Niger’ by Dr. Chidi Amuta).
Many CAN leaders chanted war songs. Yet, Nigeria’s constitution never changed and the nation never became Islamized. The benefit is an opportunity to borrow money at a lower rate from the over 1 trillion dollars available to member-nations, as an alternative to borrowing from World Bank (WB) or International Monetary Fund (IMF) whose interest-rates Strangulates African Economics.
The collateral benefit of this membership: former President Olusegun Obasanjo became the first Nigerian President to attend OIC meeting in 2000, and President Goodluck Jonathan, the second Nigerian President to host the D8 meeting consisting of Iran, Indonesia, Pakistan, Malaysia, Egypt, Turkey, Bangladeshi with Nigeria as the 8th Nation-and all are members of OIC; discussing economic cooperation; yet, Obasanjo and Jonathan, are still Christians.
What is wrong with non-interest banking or Faith Based Institutional Banking (FBIB); Faith Based Financial Institutional (FBFI); Faith Based Credit Unions (FBCU); Faith Based Micro Financing Bank (FBMFB); and Faith Based Mortgage Financial Institutional (FBMFI)? The real truth is that there is nothing wrong.
The very essence of non-interest banking principles as stated in all the existing Holy Books (Torah, Bible, and Koran), can be traced as far back as 600AD. And the earliest reference to the reorganization of this concept based on profit sharing, loss sharing and rather than interest, according to experts and records are found in Anwar Quareshi (1946), Naiem Siddiqi (1948) and Mahmud Ahmad (1952) and other writers and periods; including up to the late 1960’s.
However, in 1972 leading to 1975, a real attempt to modernize the concept was practiced in Egypt, and the success led to the establishment of Islamic Development Bank (IDB) in 1975. The first modern Islamic Commercial Bank, Dubai Islamic Bank opened its doors in 1975. The concept of Islamic Bank has more than 300 institutions spread over 51 countries, including the United States through companies such as the Michigan-based University Bank, as well as over 250 mutual funds that comply with Islamic principles around the world. It is estimated that over US$822 billion world-wide Sharia compliant assets are managed according to The Economist. And according to CIMB Group Holdings, Islamic finance is the fastest-growing segment of the Global Financial System and Sales of Islamic Bond may rise by 24 percent to US$25 billion in 2010.
My dear CAN leader, this idea was abducted from the Catholic owned Vatican Bank. Presently, the Vatican has put forward the idea that “the principles of Islamic Finance may represent a possible cure for ailing markets.” This postulation was made immediately after the US-led Global economic collapse in 2009.
The concept of ‘non-interest-banking’ is not new in Nigeria, however, this is the first time a governor of Central Bank of Nigeria (CBN) is seen to be vigorously pursuing its implementation. Yes, the Apex Bank should have sensitized the public more before embarking on the pronouncements. However, before the current governor Sanusi Lamido Sanusi became governor in 2009, Islamic Banking/Non-Interest Banking was approved by the CBN during the tenure of Professor Chukwuma C. Soludo. And before Soludo, there is an established provision for non-interest banking in the BOFIA ACT 1991 as amended, Sections 9, 23 and 52 provided for the establishment of Islamic Banking in Nigeria, during IBB-era. As a result of this provision, the former Habib Bank, which became Bank PHB, and is now keystone Bank, was given an approval in 1992 to operate a window of Islamic banking, which is still operational, except that the management never allowed it to prosper.
Now enter Jaiz bank; a bank with both Christian and Muslim investors; whose Chairman is Alhaji Umaru Mutallab; former Managing Director of United Bank for Africa (UBA) in the 90’s and Minister of Housing during the first coming of Obasanjo, in the 70’s; and the longest serving chairman of First Bank Plc; he initiated the greatest transformations the bank went through before finally bowing out in 2010.
In 2002 or thereabout, JAIZ Bank applied for banking license to operate a national Bank under a non-interest-banking law as indicate under BOFIA act of 1991. While the application was being processed, Dr. Joseph Sanusi was replaced with Prof. Chukwuma C. Soludo. Before the completion of the process, the then governor of CBN came out with the recapitalization – exercise; the banking license that was 2 Billion Naira, shot up to 25 Billion Naira. JAIZ bank was advised to either recapitalize or pursue other option. JAIZ bank started working to raise the 25 billion, however, an opportunity arose when Prof. Soludo, created the Micro Finance; Community Bank; and Regional Bank concepts. This gave JAIZ bank the opportunity to seek to become a regional bank, with the same ideology of ‘non-interest-banking’.
On 21st of June 2011, CBN under Lamido Sanusi, re-issued a guideline on non-Interest Financial Institutions (NIFI) which overrides the old one of 13th January 2011. The new guidelines recognizes two forms of NIFI’A’s based on principles of Islamic commercial jurisprudence of ‘usury’; and another NIFIA’s based on any other established rules and principles. The latter was done to encourage members of CAN to equally do the same as JAIZ bank to move the nation’s real economic sector forward in tandem with President Goodluck Jonathan’s economic transformation policy. It is also imperative to mention that CBN in recognition of the diversified nature of our Constitution, replaced the CBN-Shariah-Council(CSC) made up of only Muslims with a new one called “CBN Advisory Council of Experts A”, which includes Christians as regulators. We must also understand that NIFIA is part of the BOFIA established since 1991; this model allows for (a) Commercial Banks, (b) Merchant Banks, and (c) specialized Banks.
Therefore, JAIZ bank should not be faulted for electing to operate under (c); the same opportunity exists for CAN to explore. It is also important to note that under the same (c), specialized banking; micro-finance banks, mortgage banks, development banks (under section 66 of BOFIA) can also exist; and what a regional banking operator requires to get a license, is, 5 Billion Naira, payable to CBN; and JAIZ bank has complied.
The quantum transformation will help the government of President Goodluck Jonathan’s administration. It means that a Nigerian, for instance: the MD of Innossons Motor Manufacturing Company, Ltd, based at Nnewi (though not a Muslim), can approach JAIZ Bank for a non-interest loan to expand his factory based on profit and loss equity; this enables him to employ more people, while expanding, without worrying about the interests accruing on a loan, because in this case, there is none.
Christian association of Nigeria (CAN) leadership must see this ‘non-interest’ banking as a great opportunity to help church members, especially graduates, to become self employed by giving them seed-money-loans to establish small-scale manufacturing, cooperative farming ventures, pharmaceutical stores, supermarkets, and all manners of businesses that comply with the teachings of their respective religions. I encourage some of our Bishops to sell off those aircrafts they own, and use the proceeds to seek for a banking license from CBN. The cost of an average Gulf-Aircraft is 35million dollars which is equivalent to about 5billion naira, the same amount required by CBN for a ‘non-interest’ banking license. If CAN prefers, we might as well call ours a ‘Christian Bank’.
After all, churches around the world are now investing heavily in establishing their own Universities, housing development for members, farm plantations, and are partners in manufacturing. In Enugu, there is a micro finance bank called ‘Nwa Chinemere’ owned by the Catholic Church, and they extend low interest loans to only Catholics.
The law established by CBN on ‘non-interest’ banking does not allow for discrimination against a borrower because of gender or his/her religion. That, in my view, should be commended. The issue of non-interest bank (be it Islamic/Christian Banking), will indeed help the economy. Imagine if the commercial banks in Nigeria will consider the plight of the masses by creating non-interest banking windows, and dispense the SMEDAN funds to small and medium business with viable and bankable business proposals without interests being attached. This will indeed help to transform the economy of our great nation; therefore, Christians and Muslims must take advantage of this rare opportunity and stop bickering over mundane issues.
Sign: Max Gbanite; Strategic Security Consultant |