A Demand for Special Court For Banks in Order - CBN, Others

a-demand-for-special-court-for-banks-in-order-cbn-others

Sakeholders of the Financial sector have called for the establishment of special tribunal for the banking sector to adjudicate on litigations arising from financial transactions.

The case for the tribunal at the ongoing process to repeal and reenact the Banking, Insurance and Financial Institutions Act 2004 and Electronic Transaction Bill.

Mr Kofo Salam-Alada, CBN’s director, legal services department in his presentation called for the enactment of a law for the creation of a Credit Tribunal to strengthen credit recovery processes and enforcement of collateral rights, strengthening the framework for reporting for insider transactions as part of measures to boost credit administration processes in banks. “It is important that a banking Tribunal is established in Nigeria".

The minister of Finance, Budget and National Planning who was represented at the public hearing said: “We support what the CBN has presented. We don’t have any objection to it".

In agreement CBN also asked the lawmakers to restrict remedy for successful action against revocation of license in line with international standards, enhancement of failing bank recovery and resolution tool kit to give more options for managing failing institutions and systemic crisis without recourse to public treasury.

It also called for enhanced requirements for payments, settlement and clearing activities to address unfolding developments. “The law has to address this,” he added.

However, there has been a disagreement between the CBN and the Nigerian Deposit Insurance Corporation (NDIC) over whose responsibility it is to manage failing banks and banks whose licenses have been revoked.

According to reporters, supporting the CBN’s call, president of the Industrial Global Union, Issa Aremu said, “We need provisions to allow for special court to manage banking issues. We can’t allow for endless litigations that can undermine the banking sector.”

NDIC said there is need to look at supervision function of the CBN and NDIC.

He said it was wrong for the NDIC to be alienated in its role of supervision and resolution of banks.

“When a bank fails, it is NDIC that makes the payment. There is no need to appoint another person as the liquidator,”.

Senate representative, Deputy leader of the Senate, Rober Ajayi Boroffice said “We have to find ways of living through the current tough times,” he said, adding that Banks and other financial institutions are central in the vibrations of the nation’s economy’’.

Senate committee on banking, insurance and other financial institutions, said “The NASS is an institution driven by public interest. The Act is long overdue for amendment to maintain the health of the banking sector. We are not taking chances. We must remain vigilant and take the Nigerian banking sector to a greater height,”

Keywords
Economy , Cbn , Ndic , Nass