Interest-Free Banking and Islamic Banking in Nigeria free essay sample

Interest-free Banking and Islamic Banking in Nigeria By: Salim Salihu Muhammed Nigeria’s quest for a virile banking reform had led to the adoption of several policies and strategies that would truly give the nation’s economy an edge towards growth and sustainability. No doubt, the bail outs of â€Å"failed banks† and the acquisition of toxic assets from bad banks’ books did saved the economy and Nigerians to a large extent from such kind of economic blows suffered in the Scandinavian banking crises.Without minding words as a follow up to an earlier publication, Zero Interest Banking in Nigeria: Identifying a Sustainable Module, I still emphasis on the identification of an achievable element for an Interest-free Banking System as well as supporting it to its plausible fullest, rather than introducing religious sentiments or interest that could harm the Nigerian financial sector. Less I forget in a hurry, do the Nigeria’s economic policy fault finders understand what Interest-free Banking entails? It is true that the Central Bank of Nigeria (CBN) had emphasized on its readiness to establish or give licence to banks wishing to operate Interest-free Banking system (which is popularly known by many as Islamic Banking because of its tandem with Islamic jurisdictions and beliefs that prevent dealings in interest (Riba) or usury). We will write a custom essay sample on Interest-Free Banking and Islamic Banking in Nigeria or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is also true that the Apex Bank has the jurisdiction, as provided in its Act to allow such financial or banking practice; but what should not be seen as true is the perceivers’ believe that the CBN’s policy was meant to enforce Islam or Shari’ah on Nigerians or construed as a personal agenda of the Apex Bank’s Chief. For the avoidance of doubts, as it were with conventional commercial banks, Interest-free banking system has its inherent pros and cons which affects the Muslims and non-Muslims alike.A first glance of how Interest-free banking system operates could set a pace of reasonable understanding to its fault finders. The bank is operated by, and has Muslims and non-Muslims customers; its lending principle is based on the belief that the provider of capital and the user of capital should equally share the risk of business ventures. Translated into banking terms, the depositor, the bank and the borrower should all share the risks and the rewards of f inancing business ventures.However, Nigeria as well as any other country wishing to practice Interest-free banking system may design a module that fit its economy, so far that its applications does not go contrary to the Islamic jurisdictions of Riba or interest, the use of money and capital; and also, identify the key challenges facing the model such as the dearth of knowledge, skills and technical capacity to regulate, supervise, or operate non interest banks. Also, higher quality personnel with experience in project management and Islamic jurisprudence are required for financing and marketing activities.Interestingly, the flexible nature of Islamic finance provides enormous opportunities; it has positive and far-reaching impact for the Nigerian economy. The interest-free banking principle in Islam allows only one kind of loan and that is qard-el-hassan (literally good loan) whereby the lender does not charge any interest or additional amount over the money lent. In conventional terms, it means a bank will not change interest on loan or stipulate a certain amount to be paid back together with the loan given. What is more?The lender (the bank) also shares in the profits or losses arising out of the enterprise for which the money was lent. Islam encourages the economy of wealth redistribution; customers (Depositors) are thus encouraged to invest their money and to become partners in order to share profits and risks in the business instead o f becoming creditors. This is unlike the interest-based commercial banking system, where all the pressure is on the borrower: he must pay back his loan, with the agreed interest, regardless of the success or failure of his venture. The present day multi-rich Nigerians can hoard money, thereby limiting or eliminating the purchasing power of money. This practice have negatively marred the efforts at keeping inflation at bay, as this idle money are not utilized in economic events that could improve the country’s Gross Domestic Product (GDP) over time. Under the Islamic Banking system, human effort, initiative, and risk involved in a productive venture are more important than the money used to finance it. Customers are encouraged to purchase and are discouraged from keeping money idle so that, for instance, hoarding money is regarded as being unacceptable.This purchasing power (money) cannot be used to make more purchasing power (money) without undergoing the intermediate step of it being used for the purchase of goods and services. Although the system encourages customer to purchase, it also prohibits or discourage investment in practices and products that are considered forbidden. The Apex Bank could make policies for the financial system and operators, as much as it is provided by enabling laws, the country’s Constitution, the Bank and Other Financial Institutions Act (BOFIA) and other relevant financial laws. We must understand that the country’s Assembly need not pass a bill for the proposed banking system (Interest-free banking), which is a product of CBN, to take effect if the listed legal provisions and other careful indices are put in place to make the system meet the economic objective for which it is meant for. All that is needed is a careful and extensive capacity building through collaboration among various stakeholders to develop cognate expertise in non-interest banking, development of an adequate regulatory and supervisory framework for the effective operation of non-interest banking in Nigeria.As it stands, it is fair to say that Interest-free banking system and Islamic banking system refers to the same policy as they operates in line to the provisions and jurisdictions of the Islamic Shari’ah system; nevertheless, it does not connotes a means of enthroning control over the sovereignty of Nigeria but a mere banking policy aimed at salvaging the country’s financial system as seen to be practiced in the United Kingdom, America and parts of Europe. In many countries where series of financial crisis had led to the implementation of monetary and financial policies, the adoption of an Interest-free regime was considered.London is the leading Islamic banking centre in the West, HSBC, Lloyds TSB, and Citigroup have opened Islamic banking units and branches throughout England. Middle Eastern Islamic banks have also set up shop in the United Kingdom (UK). These banks also targeted non-Muslims with the message that their services are ethically superior to those of the West, pushing the idea that interest – and capitalism – is unethical and should be replaced in Europe by the Islamic financial model; patronage by non-Muslims have received a continuous increase in the UK. Wasn’t England the birthplace of the Industrial Revolution and creator of the common law, the most successful and equitable legal system in history? One thing I must emphasis here is, any bank, be it Islamic or conventional, risks running losses if it does not charge some form of interest; Islamic banks circumvent this danger by extending a type of Islamic â€Å"credit† that shifts risk to the borrower in a manner similar to interest. In the UK Islamic Banking model, the banks’ Shari’ah boards legitimate the charges by renaming them â€Å"commissions† or â€Å"profits. Some of us could be wondering why Islamic banks could remain profitable – or ideologically influential – if they complied with the Qur’anic injunction again interest. An Islamic bank is no different. It must partake in the money creation business. And it must therefore fix its financial rate of return at the outset in most of its business. Thats why Islamic bank ing cannot succeed in being Islamic, at least, not in the way that we understand the terms â€Å"banking† and â€Å"Islamic† today. Islamic finance is not a product to be offered to a niche market. It is a system. It must be promoted and implemented as a system as did the UK. Nigeria could buy from the West, especially with the United States’ strategy in understanding the system and how US Deputy Secretary of the Treasury Robert M. Kimmitt showed the world that the U. S. was interested in learning more about Islamic finance through holding an Islamic Finance 101 course in Washington to educate government officials on its ins and outs. Whatever the system that the Apex Bank deems fit to aid in strengthening the banking reforms, it is left for the customers and Nigerians to decide on which financial product to explore. As it stands today with Nigeria’s conventional banks increasing minimum cash balance in savings (deposit) accounts to N25,000. 00 and thereabout, the Islamic Banking could be a succour towards Sustaining Competition in Banking Reforms for a surviving economy whose average citizens earns far less than N18. 000. 00 per month. Salim Salihu Muhammed [emailprotected] com

Free Essays on Civil War Causes

Many average Americans would attribute the cause of the American Civil War to slavery, but are there other possible causes? Could the â€Å"history† taught in so many classrooms throughout the United States of America be wrong about something so important as the real cause of the Civil War? This paper will briefly discuss and present information on possible causes of the American Civil War other than the commonly believed slavery issue. When asked what caused the American Civil War, most will say that slavery caused it. In fact, that was my original belief prior to beginning this study. President Abraham Lincoln never really addressed the slavery issue until support of the war started dwindling in the north. During the early days of the Civil War, he actually ordered slaves who escaped from the south to the north to be return to their owner. He did this in support of the Fugitive Slave Act, which was part of a collection of often referred to as the Compromise of 1850. Slavery was officially â€Å"tied† to the Civil War as a reason to fight after the President Lincoln made his Emancipation Proclamation is 1862. The following is an excerpt from his famous speech: â€Å"That on the 1st day of January, A.D. 1863, all persons held as slaves within any State or designated part of a State the people whereof shall then be in rebellion against the United States shall be then, thenceforward, and forever free; and the executive government of the United States, including the military and naval authority thereof, will recognize and maintain the freedom of such persons and will do no act or acts to repress such persons, or any of them, in any efforts they may make for their actual freedom.† President Lincoln himself was â€Å"a believer in white supremacy† and was recorded making such statements during debates with Douglas. One such statement was recorded on September 18, 1858: â€Å"I will say then that I am not, nor have I ever been in th... Free Essays on Civil War Causes Free Essays on Civil War Causes Many average Americans would attribute the cause of the American Civil War to slavery, but are there other possible causes? Could the â€Å"history† taught in so many classrooms throughout the United States of America be wrong about something so important as the real cause of the Civil War? This paper will briefly discuss and present information on possible causes of the American Civil War other than the commonly believed slavery issue. When asked what caused the American Civil War, most will say that slavery caused it. In fact, that was my original belief prior to beginning this study. President Abraham Lincoln never really addressed the slavery issue until support of the war started dwindling in the north. During the early days of the Civil War, he actually ordered slaves who escaped from the south to the north to be return to their owner. He did this in support of the Fugitive Slave Act, which was part of a collection of often referred to as the Compromise of 1850. Slavery was officially â€Å"tied† to the Civil War as a reason to fight after the President Lincoln made his Emancipation Proclamation is 1862. The following is an excerpt from his famous speech: â€Å"That on the 1st day of January, A.D. 1863, all persons held as slaves within any State or designated part of a State the people whereof shall then be in rebellion against the United States shall be then, thenceforward, and forever free; and the executive government of the United States, including the military and naval authority thereof, will recognize and maintain the freedom of such persons and will do no act or acts to repress such persons, or any of them, in any efforts they may make for their actual freedom.† President Lincoln himself was â€Å"a believer in white supremacy† and was recorded making such statements during debates with Douglas. One such statement was recorded on September 18, 1858: â€Å"I will say then that I am not, nor have I ever been in th...

Network Server Administration Research Paper Example | Topics and Well Written Essays - 2500 words

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Police ethics Essay Example | Topics and Well Written Essays - 500 words

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Management Theory Assignment Example | Topics and Well Written Essays - 1500 words

Management Theory - Assignment Example Management is of fundamental value to companies. Every organization is concerned with planning to get things done, organizing the business to ensure efficient and effective operations and motivate employees as well as develop a vision for everyone to work on (Williams, 2009). Finally, the need for having controls in place is high as the goals that have been set must be monitored and their fulfillment must be measured. Therefore, management is quintessential in making businesses successful as well as ensuring smooth sailing once that success has been achieved. The significance of management can be ascertained from the fact that businesses spend millions on hiring management consultants to guide them on effective management practices (Williams, 2009). These consultants offer insights as to how managers can lead people effectively, motivate them, deal with various people related issues and manage complex projects. Management, therefore, is the art of getting work accomplished through ot hers. Successful managers may often not be experts themselves but know how get work done through other experts. For instance, the manager of the car plant at General Motors narrated how he has never made a car part in his life and how this is not his job(Williams, 2009). He further explained how, as a manager, his role was to create an environment conducive for people to make these parts efficiently while at the same time staying motivated with their work. On the other hand, however, this conventional view has been contradicted by leaders such as Steve Jobs who not only got work done through people but was actively involved in the technical aspects of the work (Greengard, 2011). Furthermore, good managers and leaders have often been associated with organizational success. One such example is that of Apple which experienced transformational growth and recognition during the tenure of Steve Jobs. It is not surprising, therefore, that Apple’s stock took a leap from $10 to $400 ( CNN Money, n.d.) during his leadership and that all major innovations including iPod, iPhone and iPad were introduced during his tenure. Furthermore, leaders and managers influence the performance of organizations by â€Å"leading by example† (Caldwell, 2004). Taken a step further, managers are responsible for managing the intellectual capital of firms which is exactly what Steve Jobs did (Prasad, 2011). By putting in proper mechanisms in place to unleash employee creativity, Jobs was able to exploit the untapped innovative potential of human resources and use it for the transformation of the company. This demonstrates just how important management is in the contemporary age of turbulent market changes and volatile business environment. Dealing with today’s customer-centric world requires organizations to manage the talents of employees in order to meet these needs. Companies whose management fails to keep pace with the changing environment and nature of work tend to s uffer. For instance, Deloitte’s study suggests the private sector of America is getting only a fraction of the return on assets that it achieved decades ago (Denning, 2011). This is due to managers failing to adapt to the changing envi

My Friends Tell Me I am Not an Atheist :: Personal Narrative essay about myself

My Friends Tell Me I am Not an Atheist    It's remarkable how many of my friends insist I am not an atheist. It seems pretty obvious to me that I don't believe any god exists, and that pretty much makes me an atheist. Nevertheless, here these people are, so insistent that I cannot possibly be an atheist. "You're too nice," they say, or "you really believe, you just don't know it" (how's that again?). Sometimes I hear something like "You believe in something, and that is really god" or "you are still looking, but you'll find Him" (he's invited to stop by my house at any time). When I have the time to converse with these people, however, it usually comes down to this: I'm really an agnostic, they say, because I am willing to admit that I don't know there isn't any god. It is apparently so important for people to believe that I'm "really just an agnostic" that I find this to be a haunting sign of the hold religion has on people. It is tragic that the mere thought of a good friend or relative being an actual, avowed atheist is s o horrible that it must be denied. Sometimes I have the chance to explain that I am an atheist not because I know there isn't a god, but because I don't believe there is. If someone insisted that their pet fish could talk, I really couldn't say I knew it didn't, especially if I could not go and see for myself, but it would still be fair for me to say that there are no talking fish. The relevance of this is that I do not believe god exists any more than I believe fish can talk. Certainly, I have not examined all species of fish, nor every single fish for that matter, nor could I ever accomplish such a feat, but the claim that they exist is so contrary to my own personal experience and reliable facts that I simply will not believe it unless very definitive proof is provided. Of course, if I visit someone's pet fish and it talks to me, I am still wiser to test the possibilities of trickery or insanity before believing it can really talk. But if I found many fish that talked, trustworthy people confirmed it, scientists pu blished carefully researched papers about them, and newspaper headlines read "INCREDIBLE DISCOVERY: TALKING FISH!" then it would be more than reasonable to believe they existed. My Friends Tell Me I am Not an Atheist :: Personal Narrative essay about myself My Friends Tell Me I am Not an Atheist    It's remarkable how many of my friends insist I am not an atheist. It seems pretty obvious to me that I don't believe any god exists, and that pretty much makes me an atheist. Nevertheless, here these people are, so insistent that I cannot possibly be an atheist. "You're too nice," they say, or "you really believe, you just don't know it" (how's that again?). Sometimes I hear something like "You believe in something, and that is really god" or "you are still looking, but you'll find Him" (he's invited to stop by my house at any time). When I have the time to converse with these people, however, it usually comes down to this: I'm really an agnostic, they say, because I am willing to admit that I don't know there isn't any god. It is apparently so important for people to believe that I'm "really just an agnostic" that I find this to be a haunting sign of the hold religion has on people. It is tragic that the mere thought of a good friend or relative being an actual, avowed atheist is s o horrible that it must be denied. Sometimes I have the chance to explain that I am an atheist not because I know there isn't a god, but because I don't believe there is. If someone insisted that their pet fish could talk, I really couldn't say I knew it didn't, especially if I could not go and see for myself, but it would still be fair for me to say that there are no talking fish. The relevance of this is that I do not believe god exists any more than I believe fish can talk. Certainly, I have not examined all species of fish, nor every single fish for that matter, nor could I ever accomplish such a feat, but the claim that they exist is so contrary to my own personal experience and reliable facts that I simply will not believe it unless very definitive proof is provided. Of course, if I visit someone's pet fish and it talks to me, I am still wiser to test the possibilities of trickery or insanity before believing it can really talk. But if I found many fish that talked, trustworthy people confirmed it, scientists pu blished carefully researched papers about them, and newspaper headlines read "INCREDIBLE DISCOVERY: TALKING FISH!" then it would be more than reasonable to believe they existed.

Individual WileyPlus Exercises Essay

1. Brief Exercise BE1-7. Indicate which statement you would examine to find each of the following items: income statement, balance sheet, retained earnings statement, or statement of cash flows. 2. Brief Exercise BE1-8. Use the basic accounting equation to answer these questions. (a) The liabilities of Cummings Company are $90,000 and the stockholders’ equity is $230,000. What is the amount of Cummings Company’s total assets? (b) The total assets of Haldeman Company are $170,000 and its stockholders’ equity is $90,000. What is the amount of its total liabilities? (c) The total assets of Dain Co. are $800,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Dain Co.’s stockholders’ equity? 3. Brief Exercise BE1-9. At the beginning of the year, Fuqua Company had total assets of $800,000 and total liabilities of $500,000. (a) If total assets increased $150,000 during the year and total liabilities decreased $80,000, what is the amount of stockholders’ equity at the end of the year? (b) During the year, total liabilities increased $100,000 and stockholders’ equity decreased $70,000. What is the amount of total assets at the end of the year. (c) If total assets decreased $90,000 and stockholders’ equity increased