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Central Bank of Nigeria CBN Has Cautioned Non-interest Banks

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The Central Bank of Nigeria has warned non-interest financial institutions against governance and compliance risks capable of undermining public confidence and financial stability in the country’s growing Islamic finance sector.

The warning was contained in a press statement issued by the apex bank on Monday following the 2nd Annual Interactive Session between the CBN Financial Regulation Advisory Council of Experts and the Advisory Committees of Experts of Non-Interest Financial Institutions held at the CBN Auditorium in Abuja.

Speaking through the Director of the Financial Policy and Regulation Department, Dr Rita Sike, the Deputy Governor, Financial System Stability, Philip Ikeazor, said the rapid expansion of the industry had increased exposure to operational and regulatory vulnerabilities.

The statement read, “The Deputy Governor, however, observed that as the industry grows in size, sophistication, and interconnectedness, it faces unique risks, particularly non-compliance risk, governance challenges, operational vulnerabilities, and emerging technological risks.

“He warned that such risks, if not properly managed, could undermine public confidence, financial stability, and the overall credibility of the non-interest finance ecosystem.”

According to the CBN, the engagement was part of ongoing efforts to strengthen Shariah governance, improve regulatory clarity, and reinforce risk management standards within the non-interest financial services industry.

The apex bank noted that non-interest financial institutions continued to play an increasingly important role in Nigeria’s financial system by providing ethical and Shariah-compliant alternatives to conventional banking.

It stated that the institutions were also contributing to financial inclusion, real sector financing, micro, small, and medium enterprises development, and shared prosperity.

The CBN further explained that the establishment of FRACE and the mandatory constitution of ACEs across all non-interest financial institutions were designed to institutionalise a harmonised governance framework for the sector.

According to the statement, sustained interaction between FRACE and ACEs remained critical to ensuring that regulatory expectations were properly understood and consistently implemented across the industry.
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“The objectives of today’s session include fostering the institutionalisation and effective operation of a robust Shariah governance system within Non-Interest Financial Institutions, and providing a structured platform for dialogue, knowledge-sharing, and collaboration,” Ikeazor was quoted in the statement.

In his remarks, the Deputy Chairman of FRACE, Prof Bashir Umar, said the interactive session was aimed at strengthening governance within the non-interest finance sub-sector and promoting constructive engagement between regulators and industry advisory committees.

He also commended the management of the CBN for reviving the session, which was first introduced in 2014.

Earlier in her welcome remarks, Sike reaffirmed the apex bank’s commitment to building a strong and well-governed non-interest financial services industry.

She noted that the growing diversity of products and delivery channels, particularly the emergence of Islamic fintech, had increased the need for stronger regulatory oversight and continuous engagement among industry stakeholders.

“The growing diversity of products, institutions, and delivery channels, particularly with the emergence of Islamic fintech, underscores the need for continuous dialogue, sound regulatory oversight, and robust advisory input from scholars and practitioners,” she said.

The session featured technical presentations on Shariah non-compliance risks in non-interest banks and the role of Islamic fintech in driving financial inclusion.

Participants at the event included members of FRACE, chairmen and members of various ACEs, managing directors of non-interest banks, senior CBN officials, and representatives of the Bank of Industry and the Securities and Exchange Commission.

The PUNCH earlier reported that experts in Nigeria’s non-interest finance space called for larger and more frequent Sukuk issuances to deepen the market, unlock long-term capital for infrastructure, and widen financial inclusion, as volatility in global markets pushes investors towards asset-backed and ethical instruments.

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BUNKERING: Troops Uncover Suspected Illegal Refinery In Rivers, Recover Crude Oil Processing Equipment

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Troops have uncovered suspected illegal crude oil refining equipment during a patrol operation in the Orashi National Forest, Ahoada West Local Government Area of Rivers State.

The development was disclosed in a report by Zagazola Makama, a counter-insurgency and security expert covering the Lake Chad region.

According to the report, the discovery was made at about 12:00pm on Saturday by troops of the 16 Brigade Garrison at Abissa in collaboration with personnel of the 5 Battalion while carrying out anti-crude oil theft operations.

Makama reported that the troops discovered equipment believed to have been used for suspected illegal crude oil refining activities during the patrol.

Items recovered from the site included one large oven drum, one large coolant, two small oven drums, one small coolant, one long galvanised pipe and two sacks containing crude oil.

Makama said the recovered items were handled in line with the operational procedures guiding the ongoing anti-crude oil theft operations.

“The operation forms part of sustained efforts by security forces to dismantle illegal refining camps, curb crude oil theft and protect critical national assets in the Niger Delta region,” the report stated. …For more, Complete your reading.
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US-Based Nigerian Seek Court To Set Aside Judgment

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A Nigerian-American engineer, Anthony Ehiedu Ugbebor, has asked the Court of Appeal to overturn the judgment of the Lagos High Court which declared that his property purchase agreement with a developer, Mr Olukayode Olusanya and Oak Homes Multinational Services Limited had been extinguished by the doctrine of novation.

The Lagos High Court had in the judgment ordered the refund of the N152 million Ugbebor paid for two luxury apartments in Victoria Island, Lagos.

In a Notice of Appeal filed by his counsel, Barrister Nasir Salau of Nasir Salau & Co., challenging the June 15, 2026 judgment delivered by Justice Akingbola George, Ugbebor argued that the trial judge misapplied settled principles of contract law, ignored material evidence, wrongly dismissed his counterclaim, and erroneously refused his claim for specific performance of the property sale agreement.

The appeal arose from Suit No. LD/4471LM/2023, instituted by property developer Olukayode Olusanya and Oak Homes against Ugbebor and the Economic and Financial Crimes Commission, EFCC, over alleged trespass on two second-floor three-bedroom apartments located at 14A Musa Yar’Adua Street, Victoria Island, Lagos.

Although the Lagos High Court dismissed most of the developer’s claims, it held that the parties’ conduct had effectively terminated their original agreement through novation.

The court also ordered Olukayode and Oak Homes to refund the N152 million previously paid by Ugbebor, while dismissing the engineer’s counterclaim seeking completion and delivery of the apartments or, alternatively, damages.

Dissatisfied with those findings, Ugbebor asked the Court of Appeal to overturn the judgment, restore the validity of the original contract and compel Oak Homes to honour its obligations under the agreement

Ugbebor also urged the appellate court to set aside the judgment in its entirety, arguing that the Lagos High Court’s findings were contrary to the evidence and established legal principles governing contracts.

He maintained that the original agreement remained valid and enforceable and asked the Court of Appeal to compel Oak Homes to honour its contractual obligations.

One of his principal complaints is that the trial judge wrongly placed the burden of proving payment on him instead of the claimant.

According to the Notice of Appeal, the judge erred in holding that he failed to make payments within contractual timelines despite evidence that the payment structure under the agreement was tied to construction milestones rather than fixed dates.

The appellant argued that under the payment schedule contained in Exhibit CW1, 35 percent of the purchase price became payable upon completion of the roofing stage, while the final 20 per cent became payable only upon completion of the apartments.

He maintained that the agreement never required payment on fixed calendar dates and that he had already paid about 80 per cent of the agreed purchase price even though the developer allegedly failed to attain the contractual milestones.

According to him, the trial judge misconstrued the payment clauses and ignored the unchallenged testimony of the defence witness that substantial payments had been made despite the developer’s inability to complete the project as agreed.

He further argued that under the Evidence Act, the burden of proving non-payment rested on Oak Homes, which alleged breach of contract, and not on him.

A major plank of the appeal is the trial court’s reliance on the doctrine of novation.

Justice George had held that the conduct of both parties created a new contractual relationship which effectively extinguished the original agreement.

However, Ugbebor argued that the finding was contrary to established principles of Nigerian contract law.

Relying on the Supreme Court’s decision in Heritage Bank Ltd v. Ajugwo, he contended that novation cannot be presumed merely from the conduct of parties.

According to him, for novation to arise there must be a clear agreement by all parties to substitute the original contract with a new one, coupled with an intention to extinguish the previous contractual obligations.

He argued that no witness testified that such a new agreement existed and no documentary evidence established one.

Rather, he maintained that the conduct relied upon by the trial court was consistent only with issues of delayed performance and alleged breach, not the creation of an entirely new contract.

He therefore urged the Court of Appeal to hold that the original agreement remained valid and binding. …For more, Complete your reading.
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