Reformation of Nigerian Legal and Regulatory Framework for Islamic Banking Sector: Lessons from the UK and Malaysia

Abstract

Islamic finance represents a unique method of banking transaction with an element of interest-free and sharing in profits and losses, hence its contribution to the economic growth of Nigeria cannot be overemphasised. However, expanding Islamic finance relies on having a robust legal framework. This study aims to investigate the regulatory framework governing Sharia banks in Nigeria. The study attempts to draw lessons from the United Kingdom and Malaysia in the area of Islamic banking and make a proposition that Nigeria can adopt in tackling the challenges it faces in regulating Islamic banking. Finally, the study would offer a plausible guide as to the need for enactment of a robust Sharia-compliant law in Nigeria and harmonisation of the various Islamic bank's laws for purpose of completeness, effectiveness, and efficiency.