The Central Bank of Nigeria wants banks and their customers to sit down and talk before rushing to court over loan fights. A circular issued on Tuesday outlines a draft plan for a Mediation and Dispute Resolution Panel under the Secured Transactions framework, and stakeholders have been asked to send in comments.
Under the proposal, any clash between lender and borrower must first go through this mediation stage; only after that process fails can a case be filed in court. The guidelines are still at consultation level, and the CBN will weigh feedback before issuing final rules.
The move targets the rising volume of contested credit claims that clog the judiciary and slow recovery for both sides. By forcing a structured negotiation window, the regulator hopes to cut legal costs, speed up resolutions and keep credit flowing.
Commercial banks, micro-finance houses, fintech lenders and their customers now have a narrow window to study the draft and submit objections or tweaks.
The CBN's insistence on a compulsory mediation panel before any loan lawsuit is a quiet but brutal shift of power toward borrowers. Once the rule bites, a bank that once threatened defaulters with immediate court action must now endure a supervised negotiation where the balance tilts away from raw legal muscle.
Behind the technocratic language lies a simple reality: the judiciary has become the collection arm of lenders, and the central bank has noticed. By forcing talks first, the CBN is telling banks to price the true risk of their lending decisions instead of dumping every default straight onto judges who move at snail speed.
For the small trader in Alaba whose goods were hypothecated or the salary earner in Yenagoa already docked by direct debit, this means a breathing space. The mediation room becomes a place to restructure tenor, trim penalty rates or even secure a partial write-off without the terror of a court summons.
If the template survives bank lobbying, expect other regulators to copy it. Power companies, telecoms and even landlords could soon push for similar "talk first" rules, turning mediation into Nigeria's default setting for private disputes.
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