Full list: Five laws guiding Nigeria’s banking activities

Joy Onuorah
Joy Onuorah
Godwin Emefiele

Recent research has shown the laws that guides, checks and balances the banking industry and their activities.

The banking industry garnered approximately $15.7 billion in foreign investments over the course of the previous five years, according to a report by Nairalytics, the research division of Nairametrics.

The Central Bank of Nigeria reported that between 2017 and 2021, Nigeria imported $68.87 billion froml abroad, with the banking industry being responsible for roughly 22.8% of this total.

Meanwhile, the real GDP contribution from the banking industry is 3.79% of the total (Q2 2022 estimates).

The Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) are the main pieces of legislation that control banking operations in Nigeria.

Other legislation include the Foreign Exchange Act, the Nigerian Deposit Insurance Corporation Act, and the Companies and Allied Matters Act 2020.

Prior to the BOFIA 2020, the BOFIA 1991 was in effect for more than 20 years. On November 12, 2020, the President, Major General Muhammadu Buhari (retd.), signed the BOFIA 2020 into law, which is now in effect.

The Central Bank of Nigeria was created by the CBN Act of 1958 before the Central Bank of Nigeria Act of 2007 existed.

However, the CBN Act of 2007, which repealed the earlier CBN Acts and all of its revisions, is the current legislative framework under which the CBN functions.

According to the BOFIA and CBN Act, the CBN is the primary regulator of the banking industry in Nigeria.

It is also responsible for overseeing and implementing the monetary and financial sector policies of the Nigerian Federal Government, as specified by the CBN Act of 2007.

Companies and Allied Matters Act of 2020 created the Corporate Affairs Commission which is tasked with exercising regulatory authority over all registered companies in Nigeria, including banks and other financial organizations.

All deposit liabilities of authorized banks must be insured under the Nigerian Deposit Insurance Corporation Act of 2006.
The Act aims to ensure that bank liquidations are conducted in an orderly manner.

The Foreign Exchange Monitoring and Miscellaneous Provisions Act of 1995 sets up the legal framework for foreign exchange transactions and regulations.

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