The Central Bank of Nigeria has set a maximum of two business days for suspending certain contractual obligations when resolving failing banks, to reduce uncertainty for lenders and their counterparties.
In a circular dated Wednesday, July 1, 2026, Acting Director, Financial Markets Department, Okey Umeano, said the guidance takes immediate effect. It interprets Sections 34(2)(b) and 40(2) of the Banks and Other Financial Institutions Act, 2020.
The CBN noted that the lack of a defined time limit under those provisions had created uncertainty for banks, financial institutions, and counterparties to financial contracts, and could hinder commercial risk management.
Key points of the guidance:
- Scope: Applies to banks, other financial institutions, and “Affected Contracts” under Sections 34(2)(b) or 40(2) of BOFIA.
- Time limit: Any suspension of payment/delivery obligations under Section 34(2)(b), or suspension of termination rights under Section 40(2), “shall not exceed a period of two business days” from the date the CBN Governor issues the written order.
Section 34(2)(b) lets the CBN facilitate the acquisition of a failing bank to protect financial stability. Section 40(2) allows the Governor, after a licence revocation, to direct resolution actions, including temporary suspension of some contract termination rights.
The CBN said the two-day cap provides clarity that any suspension will be temporary, giving market participants more certainty.
The circular was issued under Section 56 of BOFIA and Section 33(1)(b) of the CBN Act, 2007. It comes as the apex bank recently revoked the licences of 46 inactive or insolvent microfinance banks, though the new guidance is not tied to any specific institution.