www.iaset.us editor@iaset.us HISTORICAL BACKGROUND OF ISLAMIC BANKING IN NIGERIA Sulaiman Sheu Adua Research Scholar, Department of Religions, History and Heritage Studies, Kwara State University, Malete, Nigeria ABSTRACT Islamic Banking in Nigeria got approval from the Central Bank in 2011, after several years of attempts by different groups and organisations. A frame work released in the same year spell out guidelines for the establishment, operations, shari’ah governance and supervision of Islamic banks which can be standalone full-fledged institutions, subsidiaries or widows in this paper and attempts is made to discuss “Islamic Banking as a viable alternative to Conventional Banking in Nigeria. Methodology relied on biography appraisal of such studies that ate related to the study. The paper begin with a short background of Islamic Banking in Nigeria and follows with the basis for the introduction of Central Bank of Nigeria and Non interest financial institutions, Central Bank of Nigeria model, different between Islamic banking, challenges and prospect of Islamic banking and ends with suggestion that there should be a sharia supervisory board for any Islamic bank and that board should consists of trust worthy scholars who are highly qualified to issue fatawa on financial transactions. KEYWORDS: Islamic Banking, Viable, Alternative, Conventional Article History Received: 29 Nov 2018 | Revised: 28 Dec 2018 | Accepted: 21 Jan 2019 INTRODUCTION Islam is a Universal religion and for times to come. It law is based upon broad principles that admit of interpretation and consensus to cover all the aspects of life and if there be anything essential uncovered, a resource may be lead to the Rule of the Necessity and Need. Having observed the way economic is being operated in most of Islamic countries contrary to the Islamic Injunction, some Muslim intellectuals in Islamic counties especially in Egypt and Pakistan started aspect of Islamic economy according to the instructions, injunction and guidance from Qu’ran, Sunna Fiqh (Islamic Jurisprudence) in order to get alternative to the conventional banking. As a result of this effort, Islamic banking started to spring up. It started in Egypt with debit ‘Bunuk il – idkhar this followed by another one in Pakistan. Bank Nasir Al-Ijtmahiy came up in Egypt was followed by the birth of the Islamic Development Bank in 1974 in Saudi-Arabia. Dubai Islamic Bank in Faisal Islamic Bank, Sudan came to being in 1977. Baitul Tamuwily Kuwait in 1977, Faisal Islamic Bank in 1977, Jordanian Islamic Bank for Financing and Investment started operation in 1978. Over the last forty years, there has been a rapid expansion of financial institutions that can be characterized Islamic in that they do not deal in interest-based transactions. At present over 60 countries, encompassing the Muslim world, have some type of Islamic banking or financial institution. Nigeria’s first Islamic Bank begins business in three International Journal of Humanities and Social Sciences (IJHSS) ISSN(P): 2319-393X; ISSN(E): 2319-3948 Vol. 8, Issue 1, Dec - Jan 2019; 67-74 © IASET