Economy

Senate Passes BOFIA 2004 Reenactment Bill, Awaits Reps’ Concurrence

The Senate on Wednesday, July 22, 2020, passed a 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.

However, for the BOFIA Amendment Bill, 2020, 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.

The committee considered presentations by industry stakeholders as the Central Bank of Nigeria (CBN), the Federal Ministry of Finance, Body of Bank Chief Executives and the Nigeria Deposit Insurance Company (NDIC).

Others 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 CBN.

In its presentation at the public hearing, the CBN pushed for a review of the framework for managing failing institutions, a restriction remedy for successful action against the 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.

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