• 28 May, 2025
• FAITH MIMDOO KEGH
• No comment

CBN Rolls Out New Financial Tools to Boost Non-Interest Banking in Nigeria.

In a move to further strengthen Nigeria’s non-interest financial market, the Central Bank of Nigeria (CBN) has introduced three new financial instruments aimed at enhancing liquidity management and market participati

on for Islamic and other non-interest financial institutions.

    What’s New?

The newly launched tools include:

     Nigerian Non-Interest Financial Institutions’ Master Repurchase Agreement (NNMRA):
  A standardized framework for repurchase (repo) transactions tailored for non-interest banking, designed to align with global best practices and clearly define the roles of involved parties.

    CBN Non-Interest Asset-Backed Securities (CNI-ABS):
  A Sharia-compliant liquidity instrument backed by physical assets, providing a secure option for non-interest banks to manage cash flow without earning or paying interest.

   CBN Non-Interest Note (CNIN):
  A non-interest-based financing option structured as a loan between the CBN and qualified institutions, auctioned periodically to support liquidity without violating Islamic finance principles.

     Why It Matters

These instruments represent a significant step in promoting financial inclusion and expanding the tools available to Nigeria’s growing non-interest banking sector. They offer alternatives that align with Islamic financial principles, support market development, and provide secure investment opportunities.

In a circular signed by the Acting Director of the Financial Markets Department, Okey Umeano, the CBN instructed all eligible institutions to integrate these instruments into their operations and comply with existing regulations. It also noted that banks would not be permitted to access the CBN’s discount window on auction days for these instruments.

The central bank emphasized that this initiative is part of its long-term strategy to deepen non-interest finance and support Nigeria’s broader economic diversification goals.

For more detailed guidance, stakeholders are advised to consult the *Revised Guidelines for the Operation of Non-Interest Financial Institutions’ Instruments* issued in 2022.

FAITH MIMDOO KEGH

Manager – Oversees the daily operations, editorial planning, and strategic direction of the platform. A graduate with a solid academic foundation in media and communication, Faith brings a wealth of experience to the TokinPoint.

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