President Muhammadu Buhari, on Thursday, November 12, 2020, assented to the Banks and Other Financial Institutions Act, 2020.
Presidential spokesman, Garba Shehu, in a statement issued on Friday, said the Act repealed the extant Banks and Other Financial Institutions Act (BOFI), 1991 as amended.
Shehu said the “monumental piece of legislation” is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.
About the Act
He said the BOFI Act, 2020 updated the enabling law in response to developments and significant evolution in the financial sector over the last two decades.
He added that it would increase the appetite of banks and other financial institutions to channel much needed credit to the real sector to support economic recovery and promote sustainable growth.
The presidential spokesman said the updated law had, therefore, introduced a credit tribunal to improve loan recovery and address the incidence of high non-performing loans within the financial system, which, he added, had been a key deterrent to lending by financial institutions.
He said the Act not only strengthened the regulatory and supervisory framework for the financial industry, but also provided additional tools for managing failing institutions and systemic distress to preserve financial stability, amongst others.
Shehu said the Central Bank of Nigeria (CBN) would hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.
According to him, “This enactment of the BOFI Act, 2020 is a historic and significant achievement, which is indicative of the effective and productive collaboration between the executive and legislature arms of government.’’
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