Interest Free banking

Posted by Felix Okoli on Monday June 24, 2013 at 11:26:16:

Interest free banking is one of the new banking products being offered by banks in Nigeria. As a result of religion, some people(Muslims especially) may prefer to deal with banks only if interest is not included. Well as a result of the market for such services, the CBN started allowing banks to make it possible.

Interest free banking is also known as Sharia banking by Nigerian Muslims and they may opt for the service for religious reasons. However, interest free banking is not limited to Muslims alone as even Christians and other faiths are allowed to operate such an account.

What is interest free banking(IFB) really about? Well, if you want to save money in your bank account but don't want to earn any interest on it, then IFB is the product you should go for. It's probably the same also if you want you want to do some bank transactions on maybe a current account or credit card account that is linked to interest free banking.

I'm not yet sure how banks would treat loans related to IFB accounts Would the loans be entirely free or would there be other conditions attached?

Most banks I've seen that offer interest free banking products tend to link it to savings as well as current accounts and this one can operate without paying or earning any interest on it.