BOFIA 2020 Restricts Banks from Employing Dismissed Civil Servants

Admin 22-Nov-2020 Business

Joba Omopariola

The 2020 Banks and Other Financial Institutions Act, (BOFIA), has restricted Nigerian banks from employing any individual that was dismissed from any of the three tiers of government in the country.

AbujaCityJournal had reported last week that President Mohammadu Buhari signed the BOFIA 2020 into law. 

According to the new law, financial institutions are barred from employing or retaining an individual that was dismissed from either the federal, state or local government institutions.

What BOFIA says

Its Section 47(2) partly reads;

“No bank shall employ or continue the employment of any person as a director, manager, secretary or an officer who (a) is of unsound mind or, as a result of ill health, is incapable of discharging his duties.

(b) is dismissed from the service of the federal, state or local government or any agencies of such government or

(c) is declared bankrupt or suspends payments or compounds with his creditors, including his bankers;

(d) is convicted of any offence involving dishonesty or fraud.

(e) is guilty of serious misconduct in relation to his duties; or (f) in the case of a person who possesses a professional qualification, is disqualified or suspended otherwise than of his own request from practising his profession by the order of any competent authority.”

Jail term for a banker that takes a gift to procure a loan

The law also prescribes a five-year jail term or a fine of N5mllion or both for any bank official who helps a customer to procure a loan in exchange for a commission or gift.

The gift collected by a banker found guilty would also be forfeited to the bank

Section 46(1) says, “Any director, manager, officer or employee of a bank or any other person receiving remuneration from the bank, who solicits, receives, consents or agrees to receive any gift, commission, employment, service, gratuity, money, property or thing of value for his own personal benefit or advantage or for that of any of his relations, from any person for-

(a) procuring or endeavouring to procure for any person any advance, loan or credit facility from the bank

(b) the purpose of the purchase or discount of any draft, note, cheque, bill of exchange or other obligation by that bank… commits an offence and is liable to conviction to (i) a fine of N5,000,000 (ii) imprisonment for a term of five years or (iii) both such fine and imprisonment and, in addition, any such gift or other commission shall be forfeited to the bank.”

If duly implemented, the development is expected to restore Nigerians confidence, especially SMEs in assessing loan facilities.

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