By Modupe Gbadeyanka
The Banks and Other Financial Institutions (BOFI) Act 2020 has been signed into law by President Muhammadu Buhari, the presidency has announced.
The Senior Special Assistant to the President on Media and Publicity, Mr Garba Shehu, in a statement on Friday, disclosed that the act was assented to by Mr Buhari on Thursday, November 12, 2020.
The significance of the piece of legislation is that it updates the enabling law in response to developments and significant evolution in the financial sector over the last two decades.
It will 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 BOFI Act 2020 repeals the extant Banks and Other Financial Institutions Act 1991 as amended and is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.
In addition, the law will enable the introduction of 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 presidency said.
Mr Shehu noted that the Central Bank of Nigeria (CBN) is expected to “hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.”
“This enactment of the BOFI Act 2020 is a historic and significant achievement, which is indicative of effective and productive collaboration between the executive and legislature arms of government,” the statement concluded.
