President Muhammadu Buhari on Thursday has assented to the Banks and Other Financial Institutions Act 2020.

It repeals the extant Banks and Other Financial Institutions Act 1991 as amended.

The legislation is expected to enhance the soundness and resilience of the financial system for sustainable growth and development of the Nigerian economy.

The BOFI Act 2020 updates the enabling law in response to developments and significant evolution in the financial sector over the last two decades.

It will also 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.

It introduces a credit tribunal to improve loan recovery and address the incidence of high non-performing loans within the financial system, which has been a key deterrent to lending by financial institutions as well as strengthens the regulatory and supervisory framework for the financial industry and provides additional tools for managing failing institutions and systemic distress to preserve financial stability amongst others.

Special Assistant to the president on media and publicity Garba Shehu said the Central Bank of Nigeria will hold structured engagements with stakeholders across various sectors of the economy on critical aspects of the Act in the coming months.

He said the enactment of the BOFI Act 2020 is a historic and significant achievement, which is indicative of effective and productive collaboration between the Executive and Legislature arm.