President Muhammadu Buhari on Thursday signed the Banks and Other Financial Institutions Act 2020. “This monumental piece of legislation is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy,” the Senior Special Assistant to the President, Garba Shehu, said in a statement issued on behalf of his principal on Friday.

The BOFI Act repeals the extant Banks and Other Financial Institutions Act 1991 as amended, and “updates the enabling law in response to developments and significant evolution in the financial sector over the last two decades. “It will increase the appetite of banks and other financial institutions to channel much-needed credit to the real sector to support economic recovery and promote sustainable growth,” the statement further noted.

The Act was passed by the Senate in July 2020. It was sponsored by Shehu Sani, the Senator who represented Kaduna Central at the upper law-making body then. Betty Apiafi (Rivers West) was the co-sponsor. It regulates the banking and businesses of other financial organizations by stopping them from carrying on such businesses in the country except they are a licensed company and incorporated in Nigeria.

Under the Act, the Governor of the Central Bank of Nigeria (CBN) can impose and review penalties on infractions in the banking sector up to the tune of N100 million. With the Act, a Special Tribunal for the enforcement and recovery of eligible loans and also the quick resolution of loan-related matters can equally be created.