BANKS AND OTHER FINANCIAL INSTITUTIONS ACT (BOFIA), 2020

An Act strengthens the Central Bank of Nigeria's supervisory powers and improves mechanisms for resolving failing banks. It targets commercial banks, other financial institutions, and depositors. This modernizes the banking regulatory framework.

What Is This Policy?

A comprehensive overhaul of Nigeria's banking regulatory legislation that strengthens the CBN's supervisory powers, improves bank resolution mechanisms, and enhances depositor protection.

Who Does It Target?

Commercial, merchant, and non-interest banks All CBN-licensed financial institutions The Central Bank of Nigeria as regulator Bank depositors, investors, and creditors

What Does It Aim to Achieve?

Modernise Nigeria's banking regulatory framework, strengthen the CBN's independence and enforcement capacity, improve resolution of failing banks, and align with international banking standards.

Key Features

Strengthened CBN Powers: Grants the CBN broader supervisory, investigative, and enforcement powers over banks and their holding companies. Bank Resolution Framework: Introduces an improved framework for resolving failing banks including bridge bank and purchase and assumption tools. Holding Company Regulation: Extends CBN regulation to bank holding companies to close supervisory gaps. Whistleblower Protections: Provides statutory protection for persons who report violations of banking laws to the CBN.

Current Status

Rollout Stage: Active - fully commenced Coverage: Nationwide banking and financial services sector Beneficiaries: Bank depositors, banking sector stability, Nigerian economy Funding: CBN operational budget; banking licence fees

How to Access

Banks: apply for licences from the CBN under BOFIA 2020 requirements Comply with CBN prudential guidelines and capital requirements Annual statutory returns must be filed with the CBN Application method: Banking licence applications to the CBN Financial Policy and Regulation Department.

Important Terms

Operating a banking business without a CBN licence is a serious criminal offence BOFIA 2020 overrides earlier banking statutes where inconsistent Directors may be held personally liable for bank failures in certain circumstances

Official Resources

Website: https://www.cbn.gov.ng Contact: Central Bank of Nigeria (CBN)

Legal Framework

The Banks and Other Financial Institutions Act (BOFIA) 2020 is the primary legislation governing banks and financial institutions in Nigeria. It operates under the Central Bank of Nigeria Act 2007 and the 1999 Constitution (Second Schedule — Exclusive Legislative List on banking). BOFIA aligns with the Basel III international banking capital and liquidity standards, the FATF Recommendations on anti-money laundering, and the Nigeria Deposit Insurance Corporation Act 2006 on depositor protection.