By Eyo Nsima
The Central Bank of Nigeria, CBN, has issued new guidelines on the disposal of Non-Permissible Income in the country.
In a circular, ‘Guidelines on Disposal of Non-Permissible Income ‘signed by Director of Policy & Regulation Department, Chibuzo Efobi, CBN, stated: “The Central bank of Nigeria, CBN in its efforts to standardise the treatment and disposal of non-Permissible Income (NPI) by the Non-Interest Financial Institutions in Nigeria, hereby issues Guidelines on Disposal of Non-Permissible Income.
“The Guidelines may be accessed from the CBN website (www.cbn.gov.ng) and all Non-Interest Financial Institutions are therefore required to comply accordingly as non-compliance will attract appropriate sanctions. The Guidelines becomes effective October 13, 2021.”
It also stated that, “The CBN Guidelines on Governance of Advisory Committees of Experts (ACE) for Institutions Offering Non-Interest Financial Services, it is part of the duties and responsibilities of the ACE to supervise and monitor the disposal of Non-Permissible Income (NPI) by the institution.
“Non-Permissible Income is any income that accrues to the institution in a Shari’ah non-compliant manner, such as interest income, penalties for delayed payment of debt obligations, or any income declared by the ACE of the institution as impermissible according to the Shari’ah.
“The following guidelines are issued to guide the ACE of Non-Interest Banks (NIB) in supervising and monitoring the disposal of NPI by the institutions. NPI is not an object of ownership of the NIB and does not confer any ownership rights on it.
“The NPI shall be put in a dedicated NPI account and shall not be commingled with the funds of the NIB. The NIB is under obligation to dispose of any NPI that accrues to it.
“Disposing the NPI to a charitable cause is regarded as proper disposal of the NPI on the following conditions: a. The NIB does not stand to benefit from the charitable cause in any way, even if by goodwill. b. The charitable cause does not give benefit to any shareholder, director, ACE member or management staff of the NIB. c. The disposal to the charity shall not be constituted nor included as part of the Corporate Social Responsibility of the NIB.”
