President Muhammadu Buhari has assented to the Banks and Other Financial Institutions Act 2020.
Garba Shehu, the presidential spokesman, made the announcement in a statement on Friday.
The Act repeals the extant Banks and Other Financial Institutions Act 1991 as amended.
The Bill for an Act to Amend the Banks & Other Financial Institutions Act (BOFIA 1991) which was sponsored by Senator Uba Sani, titled: “The Banks & Other Financial Institutions Act (Repeal & Re-enactment)Bill 2020” seeks to update the existing Act & bring it in line with global best practices.
The legislation is expected to enhance the resilience of the financial system for the growth of the Nigerian economy.
It updates the enabling law in response to developments and significant evolution in the financial sector.
The Presidency said the Act will increase the appetite of banks and other financial institutions to channel credit to the real sector.
It also introduces a credit tribunal to improve loan recovery.
Furthermore, the legislation addresses the incidence of high non-performing loans within the financial system.
The Act strengthens the regulatory and supervisory framework for the financial industry.
It provides additional tools for managing failing institutions and systemic distress to preserve financial stability.
The Central Bank of Nigeria, CBN, would meet stakeholders across various sectors to discuss critical aspects of the Act.
According to Senator Uba Sani who expressed his joy in a statement released on Friday evening after the assent by the President, it is indeed a milestone; a key step toward reinventing and re-energizing the banking and financial sector in Nigeria.