The Senate on Wednesday, July 22, 2020 passed the Bill to repealthe Banks and Other Financial Institutions Act (BOFIA) CAP B3 Laws of theFederation of Nigeria 2004 and to re-enact Banks and Other FinancialInstitutions Act (BOFIA) CAP B3 Laws of the Federation of Nigeria 2004(Amendment) Bill, 2020.
The passage of the Bill passed normal legislative processes, which startedwith the Sponsors presenting the Bill for First Reading on Tuesday, May 12,2020 and a Second Reading on Tuesday, May 19, 2020. Following the debateby the Senate at the plenary, the Bill was referred to the Senate Committeeon Banking, Insurance and Other Financial Institutions for further legislative actions.
Wednesday’s passage of the Bill, after a clause by clause consideration bythe Senate at its Plenary, followed the public hearing by the Senate Committee on Banking, Insurance and Other Financial Institutions onWednesday, July 15, 2020, to consider the opinions of stakeholders in theindustry such as the Central Bank of Nigeria (CBN), the Federal Ministry ofFinance, Body of Bank CEOs and the Nigeria Deposit Insurance Company(NDIC). Others at the hearing were the Securities and Exchange Commission(SEC), Corporate A7airs 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 Sta7 of Banks, Insurance & Financial Institutions (ASSBIFI) and the National Unionof Banks, Insurance and Financial Institutions Employees (NUBIFE).
In addition to strengthening the Nigerian :nancial system, the Bill sponsoredby Senator Uba Sani (Kaduna Central) and co-sponsored by Senator BettyJocelyn Apia: (Rivers West), seeks to regulate banking and businesses of other :nancial 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 andrevocation 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 bythe Senate to become Law, it has to be similarly passed by the House of Representatives; after which the Reports will be harmonised and forwardedto 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 failinginstitutions, a restriction remedy for successful action against revocation of licenses in line with international standards and the creation of a CreditTribunal. The CBN, which was largely backed by the Nigeria Deposit InsuranceCorporation (NDIC), the Chartered Institute of Bankers of Nigeria (CIBN) andother stakeholders, also made a case for enhancement of regulatory measures for single obligor limits, transfer of signi:cant holdings and thestrengthening of the sanctions regime to make it more deterrent.
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