Economic Potentials of Islamic Banking in Nigeria and the Challenges of Introducing it into Conventional Financial System

This paper explores the economic benefits of Islamic banking in Nigeria and the challenges of introducing it into conventional financial system in view of the arguments and counter arguments about the relevance and economic viability of Islamic banking on the one hand, and on the other hand, its appropriateness and constitutionality that follow the release of the framework for the regulation and supervision of Non-Interest Financial Institutions (NIFIs) by Central Bank of Nigeria (CBN). The paper is both descriptive and exploratory with presentation based on review of both theoretical and empirical literature. The paper confirms that Islamic banking has a lot of economic benefits to the Nigerian economy. It represents potential for serving as a vehicle for fund mobilisation, a means of achieving financial inclusion, employment generation, and exchange of expertise among other things. The paper however suggests that for these economic benefits to be actualised, CBN and bank operators respectively need to address the regulatory and operational challenges that usually follow the introduction of Islamic banking into an conventional financial system