The Senate has passed a Bill repealing the Banks and Other Financial Institutions Act (BOFIA) CAP B3 Laws of the Federation of Nigeria 2004 and replacing it with the one of the 2020 as Amended.
The passage of the Bill today, July 22, was made after a clause by clause consideration by the Senate at its Plenary, and after the public hearing by the Senate Committee on Banking, Insurance and Other Financial Institutions.
The opinions of stakeholders in the industry, such as the Central Bank of Nigeria (CBN), the Federal Ministry of Finance, Body of Bank CEOs and the Nigeria Deposit Insurance Company (NDIC) were part of the consideration for the Bill.
Others which made appearances at the hearing were the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), the Chartered Institute of Bankers of Nigeria (CIBN), the Nigeria Labour Congress (NLC), the Financial Correspondents Association of Nigeria (FICAN), the Association of Senior Staff of Banks, Insurance & Financial Institutions (ASSBIFI) and the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFE).
In addition to strengthening the Nigerian financial system, the Bill, which was sponsored by Senator Uba Sani (Kaduna Central) and co-sponsored by Senator Betty Jocelyn Apiafi (Rivers West), seeks to regulate banking and businesses of other financial institutions by prohibiting the carrying on of such businesses in Nigeria except under licence and by a company incorporated in Nigeria.
The Bill also made adequate provisions for proper licensing, supervision and revocation of licenses of such institutions by the Central Bank of Nigeria.
However, for the Banks and Other Financial Institutions Act (BOFIA) CAP B3 Laws of the Federation of Nigeria 2004 (Amendment) Bill, 2020, passed by the Senate to become Law, it has to be similarly passed by the House of Representatives; after which the Reports will be harmonised and forwarded to the President for assent.
It will be recalled that the Central Bank of Nigeria (CBN) in its presentation at the public hearing pushed for a review of the framework for managing failing institutions, a restriction remedy for successful action against revocation of licenses in line with international standards and the creation of a Credit Tribunal.
The CBN, which was largely backed by the Nigeria Deposit Insurance Corporation (NDIC), the Chartered Institute of Bankers of Nigeria (CIBN) and other stakeholders, also made a case for enhancement of regulatory measures for single obligor limits, transfer of significant holdings and the strengthening of the sanctions regime to make it more deterrent.