The Central Bank of Nigeria (CBN) has released an exposure draft outlining plans to establish a 30-member dispute-resolution panel to strengthen consumer protection and improve confidence in Nigeria’s financial system.
According to a circular signed by the acting director of the Development Finance Advisory Department of the CBN, Paul Oluikpe, the establishment of the Mediation and Dispute Resolution Panel (MDRP) is in furtherance of efforts to strengthen the financial ecosystem, ensure compliance with extant legislation, and enhance the efficiency of financial intermediation.
The draft guidelines and modalities for the operation of the MDRP are in line with the Secured Transactions in Movable Assets (STMA) Act, 2017, which established a MDRP as the first recourse for mediation and settlement over any civil dispute which may arise between the creditor and the grantor in the course of implementing the Act.
The act also mandates the Governor of the Bank to issue guidelines that will set out the modalities and regulate the Panel’s functioning, among others. The circular further noted that the “MDRP is intended to provide a specialised, cost-effective platform for resolving disputes arising from creation, perfection and enforcement of security interests in movable assets.
“The key objective of the MDRP guidelines is to establish a clear and standardised procedure for managing STMA-related disputes, while ensuring transparency, fairness and efficiency to bolster confidence in the secured transactions in movable assets system.”
According to the draft guideline, the CBN will “appoint 30 persons from whom panels shall be constituted, with each panel comprising 3 members. The members shall serve on a rotational basis for an initial term of four years.
“Upon satisfactory performance, determined through an evaluation by the CBN, members may be reappointed for an additional term of four years. The tenure of members shall not exceed two terms of four years each, which need not be consecutive.
“Members shall be professionals with a minimum of 10 years of relevant experience in any of law, banking, finance, mediation, arbitration, alternative dispute resolution, or financial regulation. Members shall be persons of proven integrity, professional competence and sound judgement.”
