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SEC says Nigeria’s Potential for Islamic Finance Jurisdiction Outstanding

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The Securities and Exchange Commission (SEC) has said Nigeria has the potential to join the leading global Islamic finance jurisdictions. Mr. Lamido Yuguda, Director General, SEC, said this when the Commission in collaboration with the Islamic Financial Services Board (IFSB), hosted the inaugural SECN-IFSB International Forum 2023, in Abuja.

The event brought together leaders and stakeholders fostering discussions, collaboration aimed at further deepening the NICM in Nigeria. Speaking at the first day of the SECN-IFSB International Forum on Non-Interest Capital Markets, Yuguda set the stage for insightful conversations and a deep dive into global and regional trends in non-interest capital markets.

He expressed the belief that “Nigeria has the potential to join the leading global Islamic finance jurisdictions when we deal with challenges such as inadequate awareness, regulatory harmonisation, and enactment of legislations that enhance legal certainty and clarity similar to what prevails within the conventional financial architecture.”

In similar fashion, Dr. Bello Lawal Danbatta, Secretary-General, IFSB, in his keynote address, commended SEC Nigeria and the government for their dedication to cultivating a resilient non- interest capital market.

“Nigeria’s Non-Interest Capital Market stands as a harmonious testament to financial innovation and progress, seamlessly weaving together the threads of ethical finance and conventional wisdom.

“The IFSB is honoured to be contributing our efforts, paired with the visionary leadership of the SEC and the Government at this stage that resonates with international regulators, market players, and policymakers – to cultivate a dynamic ecosystem where knowledge blossoms, preferences flourish, and inclusivity thrives,” he said.

In his remarks, Mr. Wale Edun, the Honourable Minister of Finance and Coordinating Minister for the Economy underscored the significance of non- interest capital markets in Nigeria’s economic landscape and the promotion of financial inclusion.

The minister highlighted the necessity for alternative financing mechanisms that prioritise equity participation over interest bearing financing models, emphasising that this approach is crucial for addressing the global debt crisis and fostering swift and inclusive growth.

A pivotal moment during the forum was the signing of a Memorandum of Understanding (MoU) between SECN and IFSB, solidifying closer collaboration, support, and the exchange of information, research, development, training, and education. The historic agreement outlines a framework for the enhancement of Shariah-compliant non-interest capital markets in the region.

The event also witnessed the launching of IFSB’s Annual Report, developed to provide a comprehensive overview of the international standard-setting organisation’s operations, accomplishments, and progress towards promoting the stability and growth of Islamic finance globally.

The forum’s discussions delved into crucial market developments and opportunities, with a particular focus on global and regional trends on non interest capital markets, sustainable green and ESG sukuk, and the role of non- interest capital market instruments in infrastructure financing.

Key recommendations include enhancing Non-Interest Capital Markets (NICM) in Nigeria through measures such as increasing awareness, establishing legal frameworks for infrastructure funding, enacting legislation for Islamic Capital Markets (ICM), providing capacity building for scholars, addressing regulatory bottlenecks, fostering collaboration among stakeholders, and leveraging technology for financial inclusion.

The discussions underscore the significance of uniform standards, public awareness, and targeted strategies to deepen the takaful sector. Moreover, there were recommendations for regular coordination meetings, the establishment of a think-tank, collaboration with academia, capacity building for conventional institutions, and exploration of innovative financing models for infrastructural projects.

The sessions showcased a notable line up of participants, including representatives from institutions such as the Central Bank, AMF-UMOA, NAICOM, Nigeria Deposit Insurance Corporation, Debt Management Office, National Pension Commission, Investment and Securities Tribunal (IST), and Financial Regulation and Advisory Council of Experts (FRACE).

Leadership figures from capital market trade groups, operators, industry players, and members of the press also actively contributed to the discussions. As drivers of sustainable and innovative Islamic finance practice, the IFSB and SECN conducted the 5th Innovation Forum which saw the convergence of industry players and other stakeholders discussing the latest developments in innovation in Islamic finance.

Sessions explored digital innovation, fintech’s role in harnessing shariah-compliant non-interest finance for financial inclusion, and regulatory issues.


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E-Financial

Panic as Hackers Allegedly Steal N9.3Bn Customers’ Fund from Union Bank

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Yetunde Oni, MD/CEO, Union Bank
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Union Bank of Nigeria Plc is facing a major financial scandal after hackers reportedly siphoned N9.3 billion from multiple customer accounts.

The breach, which occurred on March 23, 2025, has led to an urgent legal battle as the bank seeks to freeze accounts suspected of receiving the stolen funds.

Court filings reveal that the cybercriminals exploited a critical system glitch, discreetly transferring the money in small amounts across 54 financial institutions to evade detection.

Oluwasegun Falola, Union Bank’s Head of E-Fraud Investigations, confirmed that tracking the transactions has been challenging due to their fragmented nature.

Acting swiftly, the bank filed a lawsuit (FHC/L/CS/629/2025) at the Federal High Court in Lagos, requesting an emergency order to halt further withdrawals. On April 2, 2025, the bank’s legal team, led by A. Adedoyin-Adeniyi, informed the court that the stolen funds were still being actively moved—suggesting an ongoing laundering operation.

In response, Justice Deinde Dipeolu granted a Post No Debit (PND) order, freezing all implicated accounts pending further investigation.

This crisis comes just 15 months after the Central Bank of Nigeria (CBN) dissolved Union Bank’s former board over governance failures. Under the leadership of MD Yetunde Oni, the bank now faces intense scrutiny as customers demand accountability.


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E-Financial

CBN Urges Banks to Source FX for PAPSS Settlement Through NFEM

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The Central Bank of Nigeria (CBN) has announced a comprehensive review of documentation requirements for transactions processed through the Pan-African Payment and Settlement System (PAPSS), aimed at enhancing intra-African trade, promoting financial inclusion, and improving operational efficiency for cross-border payments within Africa.

In a press release issued on Monday, the CBN outlined key updates to the documentation framework in a circular addressed to Authorised Dealer Banks (ADBs) and the general public.

The revised guidelines are part of the CBN’s ongoing efforts to streamline processes and support seamless financial transactions across the continent.

Under the new framework, individuals conducting low-value transactions up to USD 2,000 equivalent in naira and corporates transacting up to USD 5,000 equivalent in naira can now rely on basic Know-Your-Customer (KYC) and Anti-Money Laundering (AML) documents already provided to their ADBs.

This measure simplifies compliance requirements for smaller transactions and reduces administrative burdens.

For transactions exceeding the specified thresholds, parties must comply with the full documentation requirements as outlined in the CBN Foreign Exchange Manual and related circulars to ensure regulatory compliance.

Applicants are also responsible for ensuring that all necessary regulatory documents are available to facilitate the clearance of goods as mandated by relevant government agencies.

The new policy permits ADBs to source foreign exchange for PAPSS settlements directly from the Nigerian Foreign Exchange Market, eliminating the previous requirement to obtain forex directly from the CBN.

Additionally, all export proceeds repatriated via PAPSS must be certified by the relevant processing banks to promote transparency and regulatory adherence.

The CBN urged all ADBs to adopt PAPSS and commence originating transactions in accordance with the updated policy.

Exporters, importers, and individuals were encouraged to familiarize themselves with the new requirements and leverage PAPSS for efficient cross-border transactions across Africa.


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E-Financial

FIRS Orders Banks to Close Unauthorised Tax Collection Accounts

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The Federal Inland Revenue Service has directed banks across the country to immediately identify and close any tax and levy collection accounts not authorised under its TaxPro Max platform.

The directive, aimed at promoting transparency and ensuring uniformity in tax collection, was disclosed in a public notice titled “Directive to close unauthorised FIRS tax collection accounts,” issued by the FIRS Chairman, Zacch Adedeji, and circulated to journalists on Monday by his Special Adviser on Media, Dare Adekanmbi.

According to the notice, all tax and levy collections must now be processed exclusively through assessments generated on the TaxPro Max system.

The FIRS warned that all banks participating in its collection, remittance, and reconciliation scheme must comply without delay, discontinue the use of unauthorised accounts, and ensure only transactions initiated from the TaxPro Max platform are processed.

“We count on your cooperation to ensure a smooth transition to this centralised system, thereby contributing to a more transparent and efficient tax collection process,” the agency stated.

Developed locally, the TaxPro Max platform facilitates key tax activities such as taxpayer registration, filing of returns, payment processing, and the issuance of tax clearance certificates.

It was introduced to streamline tax administration and support the FIRS’s broader digitalisation agenda.

The agency also urged taxpayers and stakeholders seeking clarification to contact its Revenue Accounting and Refund Department.


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