CBN Proposes Mandatory Loan Dispute Panel
The Central Bank of Nigeria has proposed a specialised mediation panel that would serve as the mandatory first point of resolution for disputes arising from secured lending transactions, effectively reducing immediate recourse to litigation in matters involving movable assets used as collateral.
The proposal was outlined in a circular issued on Tuesday and signed by P. I. Oluikpe, Acting Director of the CBN’s Development Finance Advisory Department. The apex bank invited stakeholders to submit comments on draft guidelines for the establishment of a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
“The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first instant jurisdiction to hear and determine any dispute arising from the operation and application of the Act,” the circular stated.
The initiative is anchored on the Secured Transactions in Movable Assets Act, 2017, which provides the legal foundation for using movable property—such as inventory, equipment, and receivables—as collateral for loans. The CBN said the panel is designed to offer “a specialised, cost-effective platform for resolving disputes arising from creation, perfection and enforcement of security interests in movable assets.”
Under the proposed guidelines, the panel would be required to deliver decisions within 90 days of the first hearing of any petition. Parties seeking mediation must first demonstrate that informal resolution efforts, including negotiations, have been attempted. Eligible disputes must involve a valid security agreement containing a mediation clause and be registered with the National Collateral Registry.
The panel would comprise 30 professionals drawn from law, banking, finance, and dispute resolution, each possessing at least 10 years of experience. Cases would be heard by rotating panels of three members, with proceedings conducted in person, virtually, or through hybrid arrangements. Decisions would be legally binding and enforceable in court as consent judgments, though parties retain the right to appeal on limited grounds relating to law or mixed law and fact.
“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,” the CBN stated.
Funding for the panel would come from CBN subventions, administrative fees paid by disputing parties, and contributions from other sources. The guidelines also emphasise confidentiality of proceedings and information shared during mediation sessions.
The proposal follows a CBN directive issued on March 12, 2026, which instructed banks to restrict access to certain banking services for large borrowers with non-performing loans. That circular, signed by Director of Banking Supervision Olubukola Akinwunmi, barred obligors whose facilities are classified as non-performing in the Credit Risk Management System or any licensed private credit bureau from obtaining new credit.
Stakeholder comments on the mediation panel guidelines are to be submitted no later than October 9, 2026, the circular stated.