File: CBN Building
Elegbede Abiodun
To improve the resettlement of disputes arising from lending.
The Central Bank of Nigeria has proposed the establishment of a mediation panel to serve as the first point of resolution for loan-related disputes, reducing immediate recourse to courts in secured lending transactions.
The resolution proposal was contained in a circular issued on Tuesday, inviting stakeholders to comment on draft guidelines for the establishment of a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
The circular was signed by the CBN’s Acting Director of the Development Finance Advisory Department, P. I. Oluikpe.
“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 apex bank stated.
The bank said the initiative was part of efforts to strengthen the financial ecosystem and improve the resolution of disputes arising from lending backed by movable assets.
It added, “The Central Bank of Nigeria is developing guidelines and modalities for the operation of a Mediation and Dispute Resolution Panel.”
According to the circular, the panel is designed to provide “a specialised, cost-effective platform for resolving disputes arising from creation, perfection and enforcement of security interests in movable assets.”
The move is anchored on the Secured Transactions in Movable Assets Act, 2017, which established the panel as the first recourse for mediation and settlement of disputes between creditors and borrowers.
The CBN noted that the objective of the guidelines is to ensure a structured, efficient system for managing disputes while boosting confidence in movable-asset-backed lending.
“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 said.
The guidelines state that the panel will adopt alternative dispute resolution mechanisms, with a focus on preserving relationships between the parties and ensuring a quicker resolution of disputes.
It also stated that the panel is expected to deliver decisions within 90 days of the first hearing of any petition before it.
Under the proposed framework, parties to a dispute must consent to the panel’s jurisdiction and demonstrate that they made efforts to resolve the issues through informal means before escalation.
“Parties shall demonstrate that they had made efforts to resolve the dispute through other informal means such as negotiations before escalation to the Panel,” the document added.
The guidelines further stipulate that disputes eligible for mediation must involve a valid security agreement, include a mediation clause, and be registered with the National Collateral Registry.
The panel will comprise professionals from law, banking, finance, and dispute resolution, each with at least 10 years’ experience.
The CBN said it would appoint 30 members, from which panels of three persons would be constituted on a rotational basis.
Each panel will be headed by a chairperson and supported by a secretariat responsible for administration, case management, scheduling and documentation.
The mediation process will involve the submission of claims and supporting documents, administrative review, and scheduled hearings, which may be conducted in person, virtually, or through a hybrid arrangement.
The guidelines also state that the panel’s decisions will be legally binding and enforceable in court as consent judgments.
“The award shall be legally binding on the parties and enforceable in court as a consent judgment or consent award,” the document stated.
However, parties retain the right to appeal decisions on limited grounds relating to law or mixed law and fact, subject to specified timelines.
The framework emphasises confidentiality, noting that proceedings and information shared during mediation sessions must be protected.
Funding for the panel will come from CBN subventions, administrative fees paid by disputing parties, and contributions from other sources.
The bank said it was seeking stakeholder input as part of its inclusive policymaking process.
“Comments should be submitted not later than 9th October 2026,” the circular stated.
The development comes about a month after the CBN directed banks to limit access to certain banking services for large borrowers with non-performing loans, in a move aimed at strengthening credit discipline and protecting financial system stability.
In a letter dated March 12, 2026, and signed by the Director of Banking Supervision, Olubukola Akinwunmi, the apex bank instructed lenders to tighten restrictions on such obligors.
The CBN stated that borrowers whose facilities have been classified as non-performing and captured in the Credit Risk Management System or any licensed private credit bureau would be barred from obtaining new credit.
It added that the measure was designed to curb loan defaults and improve overall risk management across the banking sector.
