Nigeria to Set Up New Resolution Fund to Help Distressed Lenders

Nigeria has passed a law that will create a new resolution fund to support failing or distressed lenders and will get commercial banks to help pay for it, Reuters reported. The Banks and Other Financial Institutions Act 2020 was signed by President Muhammadu Buhari on Friday, and is in response to developments in the financial sector over the past 20 years. Under the new law, the central bank will invest 10 billion naira ($26.3 million) while the Nigerian deposit insurer NDIC will contribute 4 billion naira. Commercial banks and other lenders will pay annually 10 basis points of their total assets into the fund. Lenders will not be allowed to pay dividends if they fail to contribute, according to the law’s provisions.nThe central bank will determine the start date of the new fund. Read more