On 13 November 2020, the President of the Federal Republic of Nigeria assented to the Bill to repeal the almost three-decade old Banks and Other Financial Institutions Act of 1991 (BOFIA) and re-enact the Banks and Other Financial Institutions Act 2020 (new BOFIA or the Act). Indeed, the repeal of BOFIA was driven by the need to – (x) strengthen the regulatory and resolution architecture for banks and other financial institutions in Nigeria, (y) close the regulatory gaps in BOFIA especially in the light of advances in technology driven delivery channels, and (z) ensure that the primary statute regulating banking and other related matters in Nigeria is modern and aligns with international best practices.
The BOFIA, which is an answer to the clarion call of both the public and private sectors of the economy and international development institutions, therefore presents a laudable opportunity to strengthen financial system stability in Nigeria and enhance banking supervision and regulation in accordance with international best practices while taking into account Nigeria’s local circumstances.
In the ensuing paragraphs, we will highlight the key amendments and changes made to the provisions of BOFIA. For ease of reference, this newsletter will first examine the key amendments and then proceed to examine the new provisions introduced under the Act.
