BOFI ACT 2020 to stimulate, sanitize, financial sector — Analysts


By Joshua Elekwachi, Abuja

Analysts have expressed that the amended Banks and Other Financial Institutions Act 2020 (BOFI) is going to help stimulate economy developments and sanitize the financial sector.

They expressed that the new act is also expected to increase the appetite of banks and other financial institution to channel much needed credit to the real sector to support economic recovery and promote sustainable growths.

President Muhammadu Buhari, had assented to the Banks and other Financial Institutions Act 2020.

The piece of the legislation repeals the extant laws and other financial institutions Act 1991 as amended.

Accordingly, the 1991 BOFI Act stipulates that every bank shall maintain with the bank cash reserves and specified deposits and as well hold special liquid assets or stablisation securities.

Speaking with Nigerian NewsDirect, the chief economist/head, Investment Research of PanAfrican Capital Holdings, Mr. Moses Ojo said the BOFI ACT 2020 is to amend some issues stakeholders have been clamouring for over the years.

He noted that part of which included the autonomous of the Central Bank of Nigeria (CBN), stressing that the amended BOFI Act 2020 is a step in good direction.

He expressed that financial institutions operating in the country are to become more regulated.

Another analyst, Managing Director of Enterprise Stockbrokers Limited, Mr. Rotimi Fakayejo  said, “the new act strengthens the regulatory and supervisory framework for the financial industry and provides additional tools for managing failing institutions and systematic distress to preserve financial stability.

“The gathered to ensure proper regulation and enforcement, a credit tribunal to improve loan recovery was introduced.”

The tribunal will address the incidence of high non-performing loans within the financial system which has been a key issue to lending by financial institutions.