Senate To NESG: Don’t Mislead Nigerians On BOFIA Act 2020

Senate Committee of Banking, Insurance and other Financial Institutions, Chaired Senator Uba Sani has expressed concern over campaign against Presidential assent to the recently passed Bank and Other Financial Institutions Act (BOFIA) 2020 by a group called Nigerian Economic Summit Group (NESG).

The lawmaker revealed that the NESG, which deliberately ignored the call to participate in the public hearing has possibly not carefully understudied the contents of the Act before attempting to mislead the public about the Act necessarily put in place to strengthen Nigeria’s economy.

NESG had in a statement expressed concerns about certain provisions of the ‘repealed and re-enacted’ Bank and Other Financial Institutions Act 2020; recently passed by both houses of the National Assembly, and in the process of being transmitted to President Muhammadu Buhari for assent, requesting Mr President to withhold his assent.

Reacting to this development in a statement he personally signed, Uba Sani (APC Kaduna Central) said his Committee received the Nigeria Economic Summit Group’s statement with shock and disappointment.

To him, “we hold the NESG in the highest regards. It is one of the key stakeholder groups that were expected to take a critical look at the repealed and re-enacted bill but they failed to do so even when the Bill was subjected to the public hearing where stakeholders made a total of 32 written submissions and were present at the National Assembly to canvass and defend their positions.

“Some of the key stakeholders that made written and oral submissions are Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation ((NDIC), Federal Ministry of Finance, Development Bank of Nigeria (DBN), Money Deposit Banks, Infrastructure Bank, Bank of Agriculture, Chartered Institute of Bankers of Nigeria, Institute of Chartered Accountants of Nigeria, Association of National Accountants of Nigeria, Securities and Exchange Commission (SEC).

“Others are Association of Bureau De Change, Corporate Affairs Commission (CAC), National Union of Banks, Insurance and Financial Institutions Employees (NUBIFE), Nigeria Security Printing and Minting Company, Nigeria Labour Congress/Trade Union Congress, FINTECH Development & Advocacy Initiative, Association of Senior Staff of Banks, Insurance and Financial Institutions, Access Bank PLC, Ministry of Communications and Digital Economy, and Finance Correspondents Association of Nigeria (FICAN).

“It therefore beats our imagination that the leadership of NESG that failed its members by refusing to attend a very important public hearing can just wake up and condemn a bill that was painstakingly put together and passed by the National Assembly.

“It is also clear to us that, the leadership of NESG has not read the bill and may just be acting on hearsay. They need to know that, the bill did not confer immunity on the Central Bank of Nigeria (CBN) officials. It does not exempt actions by the CBN from judicial review”, he said.

For the avoidance of doubts he said, “the specific provision of BOFIA 2020 that NESG may have been told confers immunity on CBN was Section 12 (6) which states that: Notwithstanding the provisions of this Act or any other enactment, no restorative or like order howsoever described, shall be granted against the Bank or the Governor in any action, suit or proceedings in relation to the revocation of a licence by the Bank under this Act, and the remedy of any claimant or applicant against the Bank or the Governor in any such action, suit or proceedings is limited to monetary compensation not exceeding the equivalent of the value of the paid-up capital of the bank at the time of the revocation of its licence”.

This is a new clause, not contained in the existing BOFIA law. The limits of the redress that can be sought/obtained in the event of a challenge of a revocation of a bank’s license were not provided for in the repealed law. The proviso does not state that the CBN Governor is immune from being sued in the case of revocation of a bank’s license. However, the proviso restricts the limits of the claims that can be made against the CBN to monetary claims which are subject to the paid-up share capital of the bank at the time of the license revocation. It is important to note that the new law does not give the CBN Governor leeway alone in the revocation of a bank’s license.

“For the benefit of NESG and other groups, BOFIA 2020 contains 130 clauses which sought to update the laws governing Banks, Financial Institutions and Financial Services; enhance efficiency in the process of obtaining and/or granting of banking licenses; impose stiffer penalties for regulatory breaches in the financial services industry and also regulate the activities of Financial Technology Companies (FINTECHs).

“If the group means well for the country, it is advised to drop its campaign against Presidential assent to the bill and may wish to consult members of the National Assembly for an Amendment Bill because this is time for stakeholders to work cooperatively in the interest of the Nigerian people”, he submitted.

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