President Muhammadu Buhari has today November 13, 2020, assented to the Banks and Other Financial Institutions Act (BOFIA) 2020.
This is according to a statement titled, “President Buhari Assents to Banks and Other Financial Institutions Act 2020″ and signed by the Senior Special Assistant to the President, Garba Shehu, as seen by Nairametrics.
Why this matters
The BOFIA 2020 indicates an intention of effective and productive collaboration between the executive and legislature arms of government to enhance the effectiveness of our financial system.
The Act also updates or builds on existing provisions of the previous Act, especially in response to developments and significant evolution in the financial sector over the last two decades. It will increasingly encourage banks and other financial institutions to channel the much-needed credit to the real sector to support economic recovery and promote sustainable growth.
What you should know
The new Act repeals the extant Banks and Other Financial Institutions Act 1991 as amended. This historic Act is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.
In addition, the new BOFIA 2020 also introduces a credit tribunal to improve loan recovery and address the incidence of high non-performing loans within the financial system, which has been a key deterrent to lending by financial institutions.
Furthermore, it strengthens the regulatory and supervisory framework for the financial industry and provides additional tools for managing failing institutions and systemic distress to preserve financial stability amongst others. The Central Bank of Nigeria will hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.