Sterling Bank Plc has now received approval in principle from the Central Bank of Nigeria for its proposed Alternative Bank limited.
The bank announced this new development through a notice which was signed by the secretary, Temitayo Adegoke before being filed in the exchange, stating that the Central Bank of Nigeria had given it an Approval in Principle for a different licence for its non-interest banking business.
This news comes after the bank received approval in Principle to restructure into a holding company (Hold Co), although it is subject to the fulfillment of specific conditions by the Central Bank.
This deal means that the Alternative Bank Limited would operate as an independent non-interest bank, however, it is still to be a subsidiary under the planned intragroup restructuring of the bank.
According to the notice sent out, the subsidiary would place its major focus on building partnerships that connect individuals and businesses leveraging technology to create business optimisation while also solving an individual’s everyday financial needs.
Also, the overall business will have its focus on social impact, corporate responsibility, and it will ensure there is religious compliance in every deal.
The Non-Interest Banking window of Sterling Bank began operations in January 2014. Then in 2018, it was reported that the bank announced that it had completed plans to request a licence for an independent Non-Interest Bank (NIB) from the Central Bank of Nigeria.
Yemi Adeola, the Managing Director/ Chief Executive Officer of Sterling Bank Plc at the time hinted at it during a visit to the management of the Nigeria Deposit Insurance Commission (NDIC) in Abuja, where he said the decision was influenced by the feasibility studies that were conducted by the bank, judging from the potential market and the financial resources possessed by the customers expected to embrace the NIB.
Non-Interest Banking is similar to Islamic Banking. It is an alternative type of banking that is an opposite of the well-known conventional banking in vital areas. This particular type of alternative banking prohibits uncertainty or suspicious behavior in transactions, or gambling. It also prohibits the funding of alcohol, tobacco, ammunition manufacturing, adult entertainment, etc.