The Central Bank of Nigeria has set a firm 2-business-day limit on how long payment suspensions and contract-termination freezes can be applied to agreements involving troubled banks or other regulated financial firms.
In a circular dated 1 July 2026 to all banks and financial institutions, the CBN said the move clarifies how Sections 34(2)(b) and 40(2) of the Banks and Other Financial Institutions Act, 2020 (BOFIA) should operate in practice. The regulator said the lack of a clear time cap had left counterparties uncertain and complicated risk management.
The notice covers any “Affected Contract” within the scope of those BOFIA provisions. It requires that any hold placed on payment, delivery or termination rights linked to a failing bank must be lifted within two business days from the date the Governor issues the written directive.
The CBN said it acted using powers granted under Section 56 of BOFIA and Section 33(1)(b) of the Central Bank of Nigeria Act, 2007, with the aim of reducing uncertainty and promoting orderly resolution of distressed institutions. The guidance, signed by Okey Umeano, Acting Director of the Financial Markets Department, is effective immediately.
