The Chairman, Senate Committee on Banking, Insurance and other Financial institutions, Senator Uba Sani, has said that the amendment of the Banks and Other Financial Institutions Act (BOFIA 1991) will bring about improvement in the financial sector in line with global best practices.
In a statement on Wednesday, Sani, who represents Kaduna Central Senatorial Zone in the Senate and the sponsor of the bill, “Repeal and Re-enactment Bill 2020”, said the old act has outlived its usefulness, as it is not in tune with current realities.
He commended his colleagues in the Senate for the enthusiasm shown and for supporting the bill which passed a second reading in the Senate on Tuesday.
According to him, amending the act, “will bring about best practices in the financial sector in line with global best practices”.
He expressed the hope that the bill would be passed in record time considering its strategic importance to the stability of the nation’s financial sector.
Sani said the old Act, “was enacted about 30 years ago and has become obsolete as a lot of changes have taken place in the banking sector, giving rise to new and emerging challenges and opportunities”.
The statement noted that the challenge of Covid-19 and the need to safeguard and strengthen the banking sector has made the repeal and reenactment of the act imperative.
According to him, the bill seeks to update the laws governing banks, financial institutions and financial service companies, as well as to enhance efficiency in the process of obtaining and granting banking licences.
Other objectives of the bill, he stated, included clear and accurate delineation of the regulatory functions of the Central Bank of Nigeria (CBN) in the financial services industry, updating and incorporating the laws for enacting, licensing and regulation of micro-finance banks in the country.
He said further that the bill also seeks to “regulate the activities of Financial Technology Companies (FINTECHs) and to update commensurate penalties for regulatory breaches in the financial services sector and ensure these penalties are stiff enough to serve as deterrent to potential breaches”.
Sani said one of the major indices of a nation on the path of sustainable development is the depth and stability of its financial sector, adding that “a stable financial sector will lift Nigeria to a new height in a post-COVID-19 world”.
“A stable and strong banking sector will refocus its activities and concentrate on providing credit access to micro, small and medium enterprises (MSMEs) to help grow the economy.
“We must, therefore, take all necessary measures to ensure the stability of the financial sector,” he said.