President Muhammadu Buhari has assented to the Banks and Other Financial Institutions Act 2020.
The legislation is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.
The BOFI Act 2020 updates the enabling law in response to developments and significant evolution in the financial sector over the last two decades. It is expected to 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 legislation 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.
The act will also 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 is expected to hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.