29-year old BOFIA Act mentioned for amendment in Senate
The Banks and Other Financial Institution Act that was enacted 29 years ago was on Tuesday mentioned for the first time in the Senate for amendment.
The bill seeking to alter the legislation is being co-sponsored by Senators Uba Sani who is the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions and Betty Appiafi (Rivers West). It was passed for first reading.
Sani had indicated late last year of plans by the upper legislative chamber to initiate moves to review the BOFIA to ensure it conforms with current financial realities.
The bill specifically seeks among other things, to enhance efficiency in the process of obtaining and granting banking licenses.
Leading the debate, Sani explained that the aim of the amendment is to update and strengthen the existing Act to effectively address challenges being faced in the finance services sector in Nigeria, in line with global best practices.
According to Sani, while in other countries like South Africa and Egypt, the laws regulating banking and other financial institutions are regularly updated, in Nigeria, the law enacted almost 30 years ago has remained in force.
Other objectives of the bill, Sani said include – to update the laws governing Banks, Financial Institutions and Financial Services Companies; enhance efficiency in the process of obtaining/granting banking licenses; accurately delineate the regulatory functions of the Central Bank of Nigeria in the financial services industry; update and incorporate the laws for enacting, licensing and regulation of micro-finance banks.
Others are to regulate the activities of financial technology companies (FINTECHs; and update commensurate penalties for regulatory breaches in the financial services sector.
The bill, when eventually passed, it will strengthen the legal framework for the regulation of banks to prevent distress especially the turbulent period of COVID-19 so that the country can adequately prepare and deal with potential post COVID-19 challenges in the banking sector.