TheCable

President Muhammad Buhari has signed the 2020 Banks and Other Financial Institutions Act into law.

According to a statement signed by Garba Shehu, the senior special assistant to the president on media and publicity, Buhari gave his assent on Thursday.

The act, which repeals the Banks and Other Financial Institutions Act 1991 as amended, introduces a credit tribunal to improve loan recovery and address the incidence of high non-performing loans within the financial system.

“This monumental piece of legislation is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy,” the statement read.

“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 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.

“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.”

According to the statement, the Central Bank of Nigeria will engage with stakeholders across various sectors of the economy on critical aspects of the act in the coming months.

The CBN has made efforts to reduce the incidence of non-performing loans in the financial sector; one of such is the Global Standing Instruction (GSI) that allows banks to debit the accounts of loan holders in other banks to settle defaults.

With nine days of becoming operational, the CBN said banks recovered N50.32 million bad loans from debtors.