A Project for the Reform of Banking Laws as They Relate to Debt Administration

The legal framework and legal institutions within which the Banking/Financial sector operates have suffered a consider-able degree of neglect over time. Although the supply of credit facilities remains the crucial function of banking and other financial institutions, little (if any) attention has been paid to enhancing the legal processes and institutions that create a conducive environment for credit activities. Happily, there is an emergent consciousness of this fact among operators of the financial system. For example, August 1992 witnessed the birth of an Association of Banks’ Lawyers, which has begun to explore the problem of bad debts vís-a-vís the legal regime governing the debt recovery process. The Association of Banks’ Lawyers (ABL) was itself preceded by our proposal in December, 1991/January, 1992 that a Forum for Commercial Court Users (FOCCUS) be established as a pressure/lobby group to catalyse an overhaul of the Laws and Judicial institutions which facilitate (among other things) the debt recovery endeavours of Banks and other financial institutions.

There are considerable meeting points between the objectives of the Forum for Commercial Court Users (FOCCUS) proposed by us, and the areas of concern addressed by the Association of Banks’ Lawyers (ABL). These problems were discussed extensively at a Seminar on “Debt Recovery Problems and Solutions – The Nigerian Experience” held on November 24, 1992 and organised by the Association of Banks’ Lawyers (ABL). The major conclusions reached at the Seminar have been summarised in a draft Communiqué prepared by the ABL. What remains is to outline and pursue a concrete programme of action for bringing these recommendations into practical effect.

The following is our proposal for implementing reform in the identified areas of concern. Our proposal proceeds in two major stages:
1. First, we identify the major target areas requiring reform through legislative action, and

2. We outline a programme of activities to facilitate the required reform.