BoG directs banks, SDIs to incorporate lenders’ loan enforcement rights in credit agreements
The Central Bank in a notice dated May 11, 2022, has issued a new directive to the various banks, specialised deposit-taking institutions (SDIs) and non-bank financial institutions (NBFIs) in the country.
Per the new directive, banks, SDIs and NBFIs henceforth, are to incorporate in credit agreements a summary of lenders’ rights of enforcement of loan and collateral agreements in line with all repayment and recovery debt provisions provided under Sections 59 to 75 of the Borrowers and Lenders Act, 2020 (Act 1052).
The new directive by the BoG, comes on the back of an earlier notice in which the apex bank expressed its approval and support for a lender to sue a borrower as a measure of debt recovery strategy in the event that the latter defaults in repayment of the loan or debt.
According to the Central Bank, the new directive is line with its mandate to promote and support the development of a fair, transparent, competitive and accessible credit market as well as ensure improved disclosure during the lending process.
Find below the notice containing further details of the BoG’s new directive: