Credit tribunal coming as Buhari signs BOFI Act 2020

Nigeria will soon have a credit tribunal to deal with issues of bad debt and loan recovery in the country.

The tribunal is one of the key provisions in the new Banks and Other Financial Institutions(BOFI) Act 2020, signed into law by President Buhari on Friday.

Nigeria’s banking system is plagued by incidence of high non-performing loans, a key deterrent to lending by financial institutions.

The bad bank, Asset Management Corporation of Nigeria (AMCON), which began operation in 2011 to mop up bad loans, has up to N5trillion irrecoverable debts in the books.

The new law repeals the extant Banks and Other Financial Institutions Act 1991 as amended.

This latest 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 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.

The Central Bank of Nigeria will hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.

“This enactment of the BOFI Act 2020 is a historic and significant achievement, which is indicative of effective and productive collaboration between the Executive and Legislature arms of Government”, said Malam Garba Shehu, a media aide of President Buhari.