CBN Circulars & Publications | |
CBN Circulars & Publications | |
1594 VIEWS | |
![]() | |
PROSHARE | |
PROSHARE |
Thursday,
July 23, 2020 / 08:55 AM / By CBN / Header Image
Credit: Twitter; @DrAhmadLawan
The Senate on Wednesday, July 22, 2020 passed the Bill to repeal the
Banks and Other Financial Institutions Act (BOFIA) CAP B3 Laws of the
Federation of Nigeria 2004 and to re-enact Banks and Other Financial
Institutions Act (BOFIA) CAP B3 Laws of the Federation of Nigeria 2004
(Amendment) Bill, 2020.
The passage of the Bill passed normal legislative processes, which
started with the Sponsors presenting the Bill for First Reading on Tuesday, May
12, 2020 and a Second Reading on Tuesday, May 19, 2020. Following the debate by
the Senate at the plenary, the Bill was referred to the Senate Committee on
Banking, Insurance and Other Financial Institutions for further legislative
actions.
Wednesday's passage of the Bill, after a clause by clause
consideration by the Senate at its Plenary, followed the public hearing by the
Senate Committee on Banking, Insurance and Other Financial Institutions on
Wednesday, July 15, 2020, to consider 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).
Others 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 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.
Related News