The Central Bank of Nigeria used its 2nd Annual Interactive Session on May 7, 2026 to warn that Nigeria’s non‑interest financial sector is facing mounting governance, compliance, operational and technological risks, a message delivered at the CBN Auditorium by Dr Rita Ijeoma Sike on behalf of Deputy Governor Philip Ikeazor.
The warning, given during the Financial Regulation Advisory Council of Experts’ meeting with the Advisory Committees of Experts of Non‑Interest Financial Institutions, said failure to manage those challenges could undermine public confidence and destabilise the wider financial system.
CBN officials spelled out the stakes: the industry’s increasing size, sophistication and interconnectedness have exposed it to unique vulnerabilities, the bank said, naming Shariah non‑compliance, governance gaps, operational weaknesses and emerging technological threats as the principal concerns confronting non‑interest finance.
Ikeazor told the session that its goals were to help institutionalise and ensure the effective operation of robust Shariah governance systems across non‑interest financial institutions and to provide a structured platform for dialogue, knowledge‑sharing and collaboration, a position Dr Sike conveyed on his behalf.
The event, revived from an initiative first introduced in 2014, brought together members of the Financial Regulation Advisory Council of Experts, chairmen and members of Advisory Committees of Experts, managing directors of non‑interest banks, senior CBN officials and representatives from the Bank of Industry and the Securities and Exchange Commission for technical briefings and exchanges.
Participants heard technical presentations that focused on the practical risks of Shariah non‑compliance in non‑interest banking and the expanding role of Islamic fintech in advancing financial inclusion. The CBN described the industry as increasingly strategic to Nigeria’s financial architecture because it offers ethical, Shariah‑compliant alternatives to conventional banking while supporting MSME financing and financial inclusion.
The regulators have taken structural steps: the establishment of the Financial Regulation Advisory Council of Experts and the mandatory constitution of Advisory Committees of Experts in all non‑interest financial institutions were designed to institutionalise a harmonised and resilient governance framework across the industry, the bank said. Deputy Governor Ikeazor stressed that sustained engagement between FRACE and the ACEs remains critical for ensuring regulatory expectations are understood and consistently implemented.
Professor Bashir Aliyu Umar, deputy chairman of FRACE, said the session was intentionally focused on strengthening governance and fostering constructive engagement between regulators and industry experts and confirmed that the CBN had revived the interactive session as a policy instrument first introduced in 2014.
The tension at the heart of the meeting was unavoidable: non‑interest financial institutions are praised by the CBN for widening access to finance and offering compliant alternatives, yet those same forces of growth and innovation are creating new vectors of risk. The same technological tools and interconnected business lines that enable Islamic fintech to reach underbanked customers also multiply the sector’s exposure to operational and cyber threats, while fast expansion strains Shariah governance and board‑level oversight.
That contradiction matters because it narrows the margin for error. The CBN warned that lapses—whether in Shariah compliance, board governance or IT resilience—could weaken the credibility of the non‑interest finance ecosystem and spill over into broader financial stability, a vulnerability regulators said they intend to close through clearer rules, advisory structures and ongoing engagement.
What happens next is concrete: the CBN has placed regulatory muscle behind engagement—maintaining FRACE and requiring ACEs—and promised continued technical collaboration with industry experts and other agencies. The likely outcome, if the central bank’s plan is implemented, will be tighter governance requirements, more rigorous Shariah oversight and an emphasis on operational and technological safeguards within non‑interest institutions.
If those steps are not taken, the course is also obvious: the credibility gains the sector has won for providing Shariah‑compliant alternatives and for supporting MSMEs could erode, and with them the public confidence regulators say is essential to financial stability. The deputy governor and FRACE made clear at the CBN Auditorium that the next phase will test whether the industry can translate engagement and advisory structures into measurable improvements in compliance and resilience.
