Acting on the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, the Central Bank of Nigeria (CBN) has introduced a new regulatory guideline limiting the suspension of payment, delivery and termination rights under certain financial contracts to a maximum of two business days, in a move aimed at improving certainty in Nigeria’s financial system.
The directive, contained in a circular dated July 1, 2026, was signed by the Acting Director of the Financial Markets Department, Okey Umeano, and takes immediate effect.
According to the apex bank, the guidance clarifies the implementation of Sections 34(2)(b) and 40(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020, particularly in situations where troubled banks or other financial institutions are undergoing regulatory resolution.
The CBN explained that the absence of a clearly defined timeframe for exercising its powers under the relevant provisions had created uncertainty for counterparties engaging in financial contracts with Nigerian banks, potentially affecting commercial risk management.
Under the new framework, any suspension of payment or delivery obligations, as well as the temporary suspension of termination rights relating to affected financial contracts, must not exceed two business days from the date the CBN Governor issues a written order or notice of suspension.
The regulator said the clarification is intended to strengthen transparency in the country’s bank resolution framework, reduce legal and commercial uncertainty, and enhance confidence among investors and market participants.
The guidance applies to what the CBN described as “affected contracts”—financial agreements involving banks or other financial institutions that fall within the scope of the relevant BOFIA provisions.
Section 34(2)(b) of BOFIA empowers the CBN to suspend certain payment or delivery obligations involving a failing bank during resolution efforts, while Section 40(2) allows the suspension of termination rights where a financial institution is undergoing regulatory intervention in the public interest.
The latest directive forms part of the apex bank’s broader efforts to reinforce financial stability and strengthen regulatory oversight. It follows a series of recent reforms, including tighter credit risk controls, enhanced supervision of related-party transactions, and the revocation of the operating licences of 46 microfinance banks that failed to meet regulatory requirements.
