BANKS AND OTHER FINANCIAL INSTITUTIONS ACTS 2020

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BANKS AND OTHER FINANCIAL INSTITUTIONS ACT 2020

LAWS OF THE FEDERATION OF NIGERIA

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EXPLANATORY NOTE

This Act, among other things, regulates banking and business of other financial institutions by prohibiting the carrying on of such businesses in Nigeria except under licence and by a company incorporated in Nigeria. Adequate provisions have been made regarding the proper regulation and supervision of such institutions by the Central Bank of Nigeria.

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ARRANGEMENT OF SECTIONS

1.       Functions, Powers and Duties of the Central Bank of Nigeria.

2.       Banking Business.

3.       Application for grant of Licence.

4.       Investment and release of prescribed Minimum Share Capital.

5.       Power to Revoke or vary conditions of Licence.

6.       Opening and closing of branches.

7.       Restructuring, reorganization, merger and disposal, etc. of Banks.

8.       Operations of Foreign Banks in Nigeria and Offshore Banking.

9.       Minimum paid-up share capital of banks and compliance with the minimum paidup share capital requirement.

10.     Shareholder’s Voting Rights to be Proportional to Shareholding.

11.     Restriction of legal proceedings in respect of shares held in the name of another.

12.     Revocation of Banking licence.

13.     Minimum capital ratio.

14.     Minimum holding of cash reserves, specified liquid assets, special deposits and stabilisation securities

PART II-DUTIES OF BANKS

15.     Maintenance of reserve fund.

16.     Restriction of dividend.

17.     Disclosure of interest by Directors, Managers and Officers.

18.     Prohibition of interlocking directorship, etc.

19.     Restrictions on certain banking activities.

20.     Acquisition of share in small and medium scale industries, etc.

21.     Restriction on operations of merchant banks.

22.     Display of information.

PART III – BOOK AND RECORDS OF ACCOUNT

23.     Proper books and records of account.

24.     Returns by banks.

25.     Publication of consolidated statements.

26.     Publication of consolidated statements

27.     Contents and form of accounts.

28.     Appointment, power and report of approved auditor.

29.     Relationship with Specialised banks and finance houses.

30.     Conduct Supervision and Competition.

31.     Appointment of Directors with supervisory functions and other examiners.

32.     Examination and report thereon.

33.     Special Examination.

PART IV- FAILING BANKS AND RESCUE TOOLS

34.     Intervention Powers in Failing Bank.

35.     Application to the Federal High Court for winding up.

36.     Cooperation, etc with Bank in Banking Crisis.

37.     Bail-in of a Failing Bank, Specialised Bank or Other Financial Institution.

38.     Bail–in Certificate.

39.     Moratorium and regulations on Bail-In eligible instruments.

40.     Termination of rights.

41.     Asset separation tool.

42.     Sale of business tool.

PART V -GENERAL AND SUPPLEMENTAL

43.     Restriction on the use of certain names.

44.     General restriction on advertisement.

45.     Closure of bank during a strike, an epidemic or pandemic.

46.     Prohibition of the receipt of commissions etc by staff of banks.

47.     Disqualification and Exclusion of Certain Individuals from Management of Banks.

48.     Offences by Companies, etc. and by servants and agents.

PART VI – MISCELLANEOUS MATTERS

49.     Offences by Directors and Managers of banks.

50.     Penalties for offences not otherwise provided for.

51.     Protection against adverse claims.
52.     Jurisdiction of the Federal High Court.

53.     Application of Companies and Allied Matters Act, etc.

54.     Netting.

55.     Priority of deposit liabilities.

56.     Power to make regulations.

CHAPTER B — SPECIALISED BANKS AND OTHER FINANCIAL INSTITUTIONS

PART VII— ESTABLISHMENT OF SPECIALISED BANKS AND OTHER FINANCIAL INSTITUTIONS

57.     Prohibition of Unlicensed Financial Institutions.

58.     Application for licence.

59.     Failure to comply with conditions of licence, etc.

60.     Supervisory power of the Bank over other financial institutions and specialised banks

61.     Application of Chapter A.

62.     Management and control of failing specialised banks and other financial institutions.

CHAPTER C- GENERAL REGULATORY POWERS

PART VIII-OTHER REGULATORY POWERS OF THE BANK

63.     Risk-based capital requirements.

64.     Consolidated supervision.

65.     Competition

66.     Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT).

67.     Corporate governance and ethics.

68.     Cybersecurity regulation by the Bank.

69.     Standard for payment, settlement and clearance activities.

70.     Designation of systemically important banks.

71.     Restriction on operations of Agents of banks.

72.     Unclaimed funds/ abandoned property.

73.     Avoidance of pre-liquidation transfers.

CHAPTER D- RESOLUTION FUND

PART IX- RESOLUTION FUND AND RESOLUTION TOOLS

74.     Establishment of banking sector resolution fund.

75.     Contribution by Bank.

76.     Contribution by the Corporation.

77.     Levy on banks, specialised banks and other financial institutions.

78.     Purpose of the resolution fund.

79.     Tax deductibility of annual levy and vested contributions.

80.     Prohibition on payment of dividend and bonuses by defaulting eligible financial institution.

81.     Establishment and composition of Board of Trustees.

82.     Duties and responsibilities of Board of Trustees.

83.     Tenure, cessation of membership, and casual vacancy.

84.     Secretariat of the Board of Trustees.

85.     Proceedings of the Board of Trustees.

86.     Non Remuneration for Members of Board of Trustees.

87.     Investment of Resolution Fund.

88.     Dissolution of Resolution Fund.

89.     Books of Accounts.

90.     Audit of Resolution Fund.

91.     Annual Report of Resolution Fund.

92.     Financial year of Resolution Fund.

93.     Limitation of action in relation to Resolution Fund, Etc.

94.     Regulation of Resolution Fund.

PART X- POWER TO IMPOSE PENALTIES

95.     Failure to Comply with Rules, etc.

96.     Power to compound offences.

97.     Power to freeze accounts.

98.     Right to Appear in Court.

99.     Power to impose and review and penalties.

100.   Power to grant exemptions.

101.   Power to Charge Fees.

CHAPTER E

SPECIAL TRIBUNALS FOR THE ENFORCEMENT AND RECOVERY OF ELIGIBLE LOANS

102.   Establishment of A Special Tribunal for the Enforcement and Recovery of Eligible Loans.

103.   Composition of the Tribunal.

104.   Functions of the National Judicial Council.

105.   Vacancy in the office of the Tribunal.

106.   Constitution of the Tribunal.

107.   Term of office.

108.   Disqualification of members of the Tribunal.

109.   Resignation and removal of members of the Tribunal.

110.   Salaries, allowances and other conditions of service of members of the Tribunal.

111.   Filling up of vacancies.

112.   Vacancies.

113.   Chief Registrar of the Tribunal.

114.   Other staff of the Tribunal.

115.   Jurisdiction of the Tribunal.

116.   Power to stay proceedings.

117.   The Tribunal’s fund.

118.   Case fees.

119.   Power to accept gifts.

120.   Account and audit.

121.   Application of Tribunal’s Fund.

122.   Powers of the Tribunal and President of the Tribunal.

123.   Panel of Experts.

124.   Request for an Expert.

125.   Right to Legal Representation.

126.   Powers of the Tribunal and President of the Tribunal.

127.   Appeal to the Court of Appeal.

128.   Further Appeal.

129.   Protection of members of Tribunal

130.   Interpretation

131.   Repeal.

132.   Citation.

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BANKS AND OTHER FINANCIAL INSTITUTIONS ACT, 2020

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[Commencement.                              NOVEMBER 13, 2020]

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ENACTED by the National Assembly of the Federal Republic of Nigeria as follows:

ALPHABETICAL INDEX TO THE LAWS OF NIGERIA