Taking a major step toward safeguarding Nigeria’s economic stability and financial sector resilience, the House of Representatives has passed for second reading A Bill for an Act to Amend the Banks and Other Financial Institutions Act, No. 5 of 2020 to Provide for the Designation, Registration and Enhanced Supervision of Systemically Important Institutions and for Related Matters (SB. 959).
Sponsored by Hon. Julius Ihonvbere, the legislative measure seeks to establish a robust legal and regulatory framework for identifying, registering, and exercising stricter oversight over financial institutions whose failure or distress could trigger systemic shocks across the national economy, commonly known as “Too Big to Fail” institutions.
Leading the debate on the floor during the second reading, lawmakers emphasized that as Nigeria’s financial ecosystem grows increasingly sophisticated and interconnected, proactive legislative safeguards are essential to protect depositors, prevent financial contagion, and insulate the broader economy from systemic risks.
By introducing proactive recovery and resolution frameworks, the Bill aims to establish clear, objective statutory criteria for identifying and officially registering Systemically Important Institutions (SIIs) within the financial sector. It empowers regulatory authorities, such as the Central Bank of Nigeria (CBN), to subject these critical institutions to heightened monitoring, stress testing, and stricter capital adequacy requirements. It introduces recovery and resolution frameworks designed to pre-emptively address institutional vulnerabilities before they escalate into national financial crises. It further seeks to enhance overall market confidence by ensuring that core pillars of the financial system operate under the highest standards of transparency, accountability, and prudent risk management.
The House remains resolute in enacting progressive economic legislations that foster a secure, resilient, and competitive financial environment for all Nigerians.
