As part of efforts to sustain public confidence, financial stability, and the orderly growth of the country’s non-interest financial services industry, the Central Bank of Nigeria (CBN) says it remains committed to strengthening Shariah governance, regulatory clarity, and risk management.
Speaking 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, on Thursday, May 7, 2026, at the CBN Auditorium, the apex bank said Non-Interest Financial Institutions (NIFIs) 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.
Welcoming members of the committees, Philip Ikeazor, the Deputy Governor, Financial System Stability, described the session as a strategic platform for deepening the credibility, resilience, and soundness of the non-interest financial services industry.
The engagement, he said, 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.
Ikeazor, who was represented by the Director, Financial Policy and Regulation Department, Dr. Rita Ijeoma Sike, 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.
The establishment of FRACE and the mandatory constitution of ACEs in every NIFI, he stressed, 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.
Speaking earlier, the Deputy Chairman of FRACE, Prof. Bashir Aliyu Umar, said the 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. He commended the CBN Management for reviving the interactive session, which was first instituted in 2014.
In her only welcome address, the Director, Financial Policy and Regulation Department, reaffirmed the CBN’s commitment to fostering a strong, credible, and well-governed non-interest financial services industry.
She noted that the growing diversity of products, institutions, and delivery channels particularly with the emergence of Islamic fintech, underscores the need for continuous dialogue, sound regulatory oversight, and robust advisory input from scholars and practitioners.
The session featured two technical presentations, with Prof. Umar delivering the first titled: “Shariah Non-Compliance Risk in Non-Interest Banks and its Impact on the Non-Interest Financial Services Industry,” while the second on “Islamic Fintech and Financial Inclusion,” was delivered by Muhammad Kabir Muhammad and Mustapha Ishaq.
A major highlight of the programme was the interactive session between FRACE and ACE members, which allowed for frank discussions on practical challenges, capacity building, independence of ACEs, risk mitigation strategies, and measures for enhancing governance and innovation in the sub-sector.
In his closing remarks and vote of thanks, Prof. Abdul-Razzaq Alaro, a member of FRACE, commended participants for their active engagement and expressed appreciation to the CBN for convening the session.
He urged stakeholders to take concrete steps towards implementing the resolutions and outcomes of the engagement, noting that the value of the session would ultimately be measured by the practical improvements recorded across the subsector.
FRACE is a bridge between conventional financial regulation and specialised faith-based financial practices by promoting consistency, credibility and investor confidence in Nigeria’s non-interest finance sector. Through its advisory role, it supports standardised interpretations, assists the CBN on complex regulatory issues, and contributes to ensuring that non-interest financial activities are legally regulated, ethically grounded and properly aligned with applicable principles. Similarly, the ACEs perform corresponding advisory and oversight functions at the institutional level within NIFIs.
The 2nd Annual FRACE–ACE Interactive Session brought together members of FRACE, Chairmen and members of various ACEs, Managing Directors of Non-Interest Banks, senior CBN officials, and other key stakeholders including representatives of the Bank of Industry and the Securities and Exchange Commission.
