BANKS AND OTHER FINANCIAL INSTITUTIONS ACT 1991 (AS AMENDED)
Act · Finance
Policy date: 2020-01-01
An Act regulates the establishment, operation, and supervision of banks and financial institutions in Nigeria. It targets commercial banks, microfinance institutions, and the Central Bank. This ensures financial stability and protects depositors.
BANKS AND OTHER FINANCIAL INSTITUTIONS ACT 1991 (AS AMENDED)
What Is This Policy?
The principal legislation that regulated the establishment, operation, and supervision of banks and other financial institutions in Nigeria from 1991 until superseded by BOFIA 2020.
Who Does It Target?
Commercial banks, merchant banks, and development banks Microfinance banks, finance companies, and mortgage institutions The Central Bank of Nigeria as regulator Bank customers and depositors
What Does It Aim to Achieve?
Provide a comprehensive legal framework for banking regulation, protect depositors, ensure financial system stability, and prescribe minimum standards for banking operations.
Key Features
Banking Licence Requirement: Required all institutions receiving deposits or extending credit to obtain a banking licence from the CBN. Minimum Capital Requirements: Prescribed minimum paid-up capital for different categories of banking licences. Prudential Regulation: Empowered the CBN to set prudential guidelines on capital adequacy, liquidity, and risk management. CBN Supervisory Powers: Granted the CBN broad powers to examine, sanction, and if necessary, revoke banking licences.
Current Status
Rollout Stage: Superseded - replaced by BOFIA 2020 Coverage: Nationwide banking sector Beneficiaries: Bank depositors, borrowers, and the financial system Funding: CBN operational budget
How to Access
Historical - refer to BOFIA 2020 for current requirements Application method: Refer to BOFIA 2020 for current banking sector regulation.
Important Terms
Superseded by BOFIA 2020; some provisions carried forward Historical compliance records from 1991-2020 governed by this Act CBN orders and circulars issued under this Act remain valid unless revoked
Official Resources
Website: https://www.cbn.gov.ng Contact: Central Bank of Nigeria (CBN)
Legal Framework
The Banks and Other Financial Institutions Act 1991 (as amended) was the primary banking legislation until superseded by BOFIA 2020. It operated under the Central Bank of Nigeria Act and the 1999 Constitution (banking on the Exclusive Legislative List). The Act aligned with IMF Financial Sector Assessment Programme standards and the Basel I and II capital adequacy frameworks applicable at the time of its enforcement.