CBN Urged To Address Liquidity Challenges On Non-Interest Investible Instruments

Stakeholders in the Non-Interest Financial Sector have urged the Central Bank of Nigeria to address the liquidity challenges faced by investors on investible instruments particularly short-term investible windows.

They also called for the adoption of social financing in collaboration with religious bodies that have the mandate to collect zakat (Islamic obligatory charity) and protect Waqf (Islamic charitable endowment)  that could be channeled towards projects targeted at poverty alleviation.

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The Stakeholders who spoke at a Webinar called for the extension of Sukuk to include the corporate private sector and the use of its proceeds in developmental initiatives such as healthcare.

The Webinar titled ‘The Impact of COVID-19 on the Banking System with a Special Focus on Non-Interest Financial Institutions’ was organised by the NDIC in collaboration with the Islamic Financial Service Board.

They also advocated the establishment of Non-Interest Microfinance Banks to target the financially excluded and underserved segments of the population in line with the financial inclusion drive of the Federal Government.

Speaking at the event, the Managing Director/Chief Executive of the Nigeria Deposit Insurance Corporation, Umaru Ibrahim said the implementation of effective fiscal and monetary policy measures is critical towards addressing the unexpected impact of the Covid-19 pandemic on the Financial System.

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He described the Webinar event as a crucial platform for stakeholders and regulators in the industry to examine and analyse the issues affecting operations in the Non-Interest Banking sector that have been impacted by the pandemic.

This, according to him, would help to proffer effective solutions and interventions to ensure stability of the financial system.

The NDIC Boss explained that the aim of the Webinar was to bring critical stakeholders in the Non-Interest Banking sector to, among other issues, evaluate the Central Bank of Nigeria’s interventions in the sector in terms of enhancing financial inclusion.

He said the event was also to gain insights into consumer behaviour in the light of the recent Sukuk Issuance as well as highlight global interventions such as the Islamic Development Bank’s Social Welfare Sukuk.

The Secretary General of the IFSB, Dr. Bello Lawal Danbatta, disclosed that since its establishment in 2003, the IFSB has remained committed to the implementation of prudent regulations to promote financial system stability for Non Interest Financial Institutions.

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He said in light of the global impact of the COVID-19 pandemic on the financial system, it is critical for industry operators to strictly monitor their Credit, Market and Operation Risks for operational resilience as well as come up with a coordinated policy response for both domestic and international financial institutions.

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