Central Bank of Nigeria on Wednesday asked National Assembly to review all financial penalties and fines upwards in order to align with current realities.

It said this at the public hearing on the Bill for an Act to repeal Banks and Other Financial Institutions Act 2004 and to re-enact the Banks and Other Financial Institutions Act 2020.

The public hearing, which held at National Assembly complex in Abuja, was organised by the Senate Committee on Banking, Insurance and Other Financial Institutions.

Speaking at the hearing on why the 2004 Act should be re-enacted, Director, Legal Services Department, CBN, Mr Kofo Salam-Alada, pointed out that some of the provisions in the Act were not in tandem with present day realities.

The apex bank stated that the fines and penalties in the 2004 Act should be reviewed.

The bank commended the committee for proposing more stringent fines and penalties regime in the new bill in comparison with the extant Act.

It, however, noted that that the revised fines and penalties might not be sufficiently deterrent in some instances given current economic conditions.

Salam-Alada noted that financial penalties needed to be adequately increased in the sector.

He said, “We suggest an upward review of all financial penalties stipulated in various sections of the bill to align with current realities.

“They should be stated as minimum amounts to allow for the flexibility to impose higher penalties to address any future diminution in money values.”

“This will also ensure that penalties continually serve as adequate deterrent to inappropriate actions.”

The CBN official also observed that the language of the bill should be revised in relevant parts to remove the need for a conviction by a court for matters considered as administrative breaches rather than criminal offences.

The Bill for an Act to repeal the Banks and Other Financial Institutions Act 2004 and re-enact the Banks and Other Financial Institutions Act 2020 was sponsored by Mr Uba Sani and Mrs Betty Apiafi.

It had earlier passed through first and second readings on the floor of the Senate following which it was passed to the Committee on Banking, Insurance and Other Financial Institutions for further legislative action.

The public hearing attracted a diverse group of critical stakeholders within the financial services sector in addition to other relevant public interest groups.

CBN recognised that the extant BOFI Act 1991 (and amended in 1997, 1999 and 2002) provided appropriate foundation for the growth and development witnessed in Nigerian banking sector over the last three decades.

It, however, noted that significant financial, socio-economic and technological transformations that were being witnessed had necessitated a review of the legal framework to ensure that it remained fit-for-purpose.

The bank also stated that the new bill would clearly separate the functions of the apex bank and that of the Nigerian Deposit Insurance Corporation.

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