CBN WARNS NON-INTEREST BANKS OVER GOVERNANCE AND COMPLIANCE RISKS

The Central Bank of Nigeria (CBN) has issued a fresh warning to non-interest financial institutions operating in the country, cautioning them against weak governance structures and compliance failures that could threaten financial stability.

The apex bank raised the concern while addressing regulatory expectations for non-interest banks, stressing the need for strict adherence to ethical standards, transparency, and risk management frameworks.

According to the CBN, institutions operating under non-interest banking principles must ensure full compliance with both regulatory guidelines and internal governance policies to maintain public confidence in the financial system.

The regulator noted that lapses in governance and compliance could expose the sector to operational risks, reputational damage, and potential systemic challenges if not properly addressed.

It further urged board members and management teams of these institutions to strengthen oversight mechanisms, improve internal controls, and ensure accountability in all financial dealings.

The CBN also reaffirmed its commitment to monitoring the activities of non-interest banks more closely, in line with its mandate to safeguard the stability and integrity of Nigeria’s banking sector.

Industry stakeholders say the warning reflects growing regulatory scrutiny as the non-interest banking sector continues to expand and attract more customers seeking alternative financial services based on ethical and profit-sharing principles.