By Chinwendu Obienyi
In a major step to deepen Nigeria’s fast-growing non-interest financial sector, the Central Bank of Nigeria (CBN) has unveiled a set of innovative liquidity management instruments aimed at enhancing market structure, broadening participation, and ensuring ethical compliance.
The new tools—the Nigerian Non-Interest Financial Institutions’ Master Repurchase Agreement (NNMRA), the CBN Non-Interest Asset Backed Securities (CNi-ABS), and the CBN Non-Interest Note (CNIN)—were formally introduced in a circular dated May 23, 2025.
The circular which was signed by the bank’s Acting Director, Financial Markets Department,
Okey Umeano, was addressed to all non-interest banks, conventional banks with non-interest windows, and authorised dealers.
According to the circular, the instruments are part of the Bank’s broader strategy to deepen the Islamic finance market and offer more robust, Shari’ah-compliant options for liquidity management.
It explained that the NNMRA is a contractual framework that standardised repurchase transactions (repos) in the non-interest segment and is expected to bring greater clarity, risk management, and international best practice to repo dealings among non-interest institutions, while also including the Central Bank itself as a counterparty.
In addition to the master repo agreement, the Bank has commenced auctions of the CNi-ABS, a liquidity instrument backed by tangible, Shari’ah-compliant assets. The instrument is tailored to meet the operational needs of non-interest banks without compromising the ethical tenets of Islamic finance.
The CNIN, meanwhile, introduces an alternative short-term liquidity tool structured as an interest-free loan. The CBN said the CNIN will be offered via scheduled auctions and will complement existing instruments in the non-interest financial space.
“The CNIN is not only a compliance-friendly tool but also a strategic instrument to broaden access to non-interest liquidity solutions,” the bank stated.
The CBN directed all market participants to refer to the “Revised Guidelines for the Operation of Non-Interest Financial Institutions’ Instruments” (2022) for technical and regulatory guidance on these new tools. Notably, on days when CNi-ABS and CNIN auctions are held, banks will be barred from accessing the Bank’s discount window—a measure designed to prevent arbitrage and safeguard monetary policy integrity.
With Nigeria’s non-interest financial market expanding steadily, the Central Bank reaffirmed its commitment to promoting a diverse, inclusive, and ethically grounded financial system.
The apex bank emphasized that these instruments will play a key role in improving liquidity efficiency and encouraging broader participation from both domestic and international investors.
“This initiative reflects our resolve to develop a vibrant non-interest financial ecosystem that supports financial stability and economic inclusion,” the CBN concluded.
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