Banks and Other Financial Institutions Act, 2020
The Banks and Other Financial Institutions Act (BOFIA) is the principal legislation governing the regulation of banks and other financial institutions in Nigeria. Enacted in 2020, it replaced the earlier BOFI Act of 1991 and empowers the Central Bank of Nigeria to supervise, regulate, and license financial institutions. The Act covers licensing, prudential regulation, depositor protection, and resolution of failing banks.
Legal area: Law governing the regulation and operation of banks and financial institutions.
Year enacted: 2020
Full text: https://lawsofnigeria.placng.org/laws/banks-and-other-financial-institutions-act.html
Key Provisions
- Part II: Licensing and establishment of banks and other financial institutions
- Part III: Powers of the Central Bank of Nigeria to supervise and regulate
- Part IV: Prudential requirements including capital adequacy and liquidity
- Part V: Protection of depositors and resolution of failing banks
- Section 10: Requirements for banking license
- Section 35: Power of the CBN to revoke banking license
Significance
BOFIA 2020 modernized Nigeria’s banking regulation framework. It strengthened the CBN’s regulatory powers, introduced provisions for bank resolution, and addressed emerging risks in the financial sector including fintech regulation. The Act replaced the 1991 legislation which had been significantly outdated.