Central Bank of Nigeria (CBN) has announced that any suspension of payment and contractual obligations involving distressed banks will not exceed two business days.
Gatekeepers News reports that the directive, which took effect on July 1, was contained in a circular signed by Okey Umeano, Acting Director of the Financial Markets Department.
The apex bank said the move is aimed at providing clarity on its powers under the Banks and Other Financial Institutions Act (BOFIA) 2020 and reducing uncertainty in the financial system.
According to the CBN, concerns had emerged over the absence of a specific timeframe for suspending payment obligations and restricting the termination of contracts when regulatory action is taken against a troubled financial institution.
Under the new guideline, any order issued by the CBN governor to suspend payment or delivery obligations, or temporarily halt the exercise of contractual termination rights involving a failing bank, can only remain in force for a maximum of two business days.
The bank said the measure will help strengthen confidence in the financial sector by ensuring that intervention measures do not create prolonged disruptions for counterparties and other stakeholders.
The directive applies to banks, financial institutions and parties to contracts affected by resolution actions. CBN noted that the clarification forms part of its broader framework for managing distressed institutions, preserving financial stability and protecting depositors while facilitating the orderly resolution of troubled banks.
