Jaiz Bank Plc has explained that it does not recognise non-permissible incomes (NPI) in its books because such incomes are against the principles of non-interest banking.
Its Executive Director, Business Development, South, Abdulfattah Amoo, said such incomes were kept aside and given to charity.
He made the clarification at the weekend in Ibadan, Oyo State during an engagement session with scholars and other stakeholders as part of the bank’s activities to deepens the understanding of non-interest banking and its benefits to individuals and society at large.
According to him, in most cases, non-permissible incomes are normally due to penalties on default from customers and not because the bank is violating Sharia principles.
“It is just that some customers did not live up to their obligations. It was not that the dynamics or the way we sold the product or the sequence of what we did went wrong, it was because the customer was negligent and didn’t play his own part in the contract. The law of regulations within Sharia permits Islamic banks to charge penalty to shape the right behavior,”Amoo said.
He explained further that the bank is not allowed to take a kobo out of such penalty because it is not its own income and as such, it is non-permissible incomes that should be given to charity.