ARRANGEMENT OF SECTIONS
1. Establishment of the People’s Bank of Nigeria.
- Functions of the Bank.
- Board of Directors of the Bank.
- Functions of the Board of Directors.
- Appointment of Managing Director.
- Appointment of other employees of the Bank.
- Fund of the Bank.
- Power to receive grants, loans and advances.
- Service charge.
- Period of repayment of loan.
- Death of borrower.
- Investment of loans.
- Funds to be applied towards the disbursements of loans only.
- Annual estimates, accounts and audit.
- Short title.
Supplementary provisions relating to the Board
An Act to establish the People’s Bank of Nigeria to provide basic credit to under-
privileged Nigerians and to make provision for related matters.
[1990 No. 22.]
[ 1 st October, 1990]
(a) a chairman;
(b) a representative of the Economic Affairs Department of the Presidency;
(c) a representative of the Governor of the Central Bank of Nigeria;
(d) a representative of the Federal Ministry of Finance Incorporated;
(e) the Managing Director of the Bank; and
(f) four other persons.
- Establishment of the People’s Bank of Nigeria
(1) There is hereby established a bank to be known as the People’s Bank of Nigeria
(in this Act referred to as “the Bank”).
(2) The Bank shall be a corporate body with perpetual succession and a common seal
and may sue and be sued in its corporate name.
(3) The Bank may, for the purposes of its functions under this Act, acquire, hold or
dispose of property (whether movable or immovable).
(4) Notwithstanding the provisions of the Banks and Other Financial Institutions Act,
the People’s Bank of Nigeria is hereby authorised without any other licence than this Act,
to operate as a specialised bank throughout the Federal Republic of Nigeria.
2. Functions of the Bank
(1) The functions of the Bank shall include-
(a) the provision of basic credit requirements of the under-privileged Nigerians
who are involved in legitimate economic activities in both urban and rural ar-
eas and who cannot normally benefit from the services of the orthodox bank-
ing system due to their inability to provide collateral security;
(b) the acceptance of savings from the same group of customers and make repay-
ments of such savings together with any interests thereon, after placing the
money, in bulk sums, on short term deposits with commercial and merchant
(2) In this section, “underprivileged Nigerians“, as confirmed by their various trade
and professional groups, include roadside mechanics, self-employed plumbers and elec-
tricians, petty traders, small-scale farmers, poultry and other livestock keepers, truck
pushers, petty tailors, dress-makers, barbers, hair dressers, washermen and women, and
other persons who need financial assistance to improve their trade and economic well-
being throughout the country.
- Board of Directors of the Bank
(1) There shall be a Board of Directors (in this Act referred to as “the Board”) which
shall be responsible for the overall policy and general management of the Bank and shall
consist of the following members, that is-
(2) The chairman and members of the Bank shall be appointed by the President on
such terms and conditions as the Federal Government may, from time to time, determine.
(3) The provisions of the Schedule to this Act shall have effect to the proceedings of
the Board and the other matters contained therein.
4. Functions of the Board of Directors
The Board shall be charged with the following functions, that is-
(a) ensuring effective and efficient implementation of the objectives for which the
Bank was established;
(b) supervising and monitoring the operations of the Bank with a view to ensuring
that loans go to the target population who are in need of such loans;
(c) maintaining the highest level of integrity and honesty in the operations of the
(d) ensuring that loans given out are repaid for the benefit of other beneficiaries;
(e) making recommendations to the Federal Government on any changes in the
policy of the Bank that it considers desirable and necessary for the improve-
ment of the Bank and its operation;
(f) giving guidelines to the chief executive officer of the Bank; and
(g) approving major projects of the Bank such as acquisition of equipment, build-
ing, land, etc., for the use of the Bank.
- Appointment of Managing Director
There shall be appointed by the President a Managing Director who shall be the chief
executive officer of the Bank and be responsible for the day-to-day management opera-
tions of the Bank.
- Appointment of other employees of the Bank
The Board of Directors may, subject to the provisions of this Act, appoint such other
persons to be employees of the Bank as may appear to the Board to be expedient and
necessary for the efficient management of the business of the Bank.
7. Fund of the Bank
(1) The Bank shall establish and maintain a fund which shall be applied towards the
disbursement of loans under this Act.
(2) The fund of the Bank shall consist of-
(a) funds allocated to the Bank by the Federal Government by way of grants or
(b) funds from the Central Bank of Nigeria;
(c) funds obtained with the approval of the Federal Government at low interest
rates from International Organisations or other financial institutions;
(d) funds obtained by the Bank by way of loan from other banks or by philanthro-
pists, at low interest rates; the level of such interest shall not be higher than the
Bank’s administrative charges.
8. Power to receive grants, loans and advances
Notwithstanding the provisions of section 10 of this Act, the Bank shall have power to
receive grants, loans and advances and other moneys on deposit from the Federal Gov-
ernment, the Central Bank of Nigeria or the public financial institutions in general under
such conditions as may be approved by the Federal Government.
- Service charge
(1) The Bank shall charge on each loan granted by it, a minimal service charge not
more than five per cent to cover overheads and operating costs of the Bank.
(2) The level of this charge may be subject to changes as may be determined, from
time to time, by the Board:
Provided that such service charge shall not exceed what is required for meeting
administrative costs of the Bank in respect of such loan.
10. Period of repayment of loan
(1) Every loan granted by the Bank under this Act shall be repaid within a period of
(2) New loans may be granted to persons who have repaid their loans in full within
the period specified in subsection (1) of this section.
(3) The Board may, from time to time, adjust the minimum or maximum loan obtain-
able under this Act.
11. Death of borrower
(1) Any loan granted by the Bank shall not be registered as free money or gift and are
repayable by every borrower.
(2) Where the recipient of a loan under this Act dies, the Bank shall endeavour to re-
trieve as much as possible the loan or its residue by whatever means it may consider ap-
propriate in the circumstances, including disposal of asset or property purchased with the
12. Investment of loans
(1) The loans taken from the Bank shall be invested within a short period thereafter,
except in extenuating circumstances such as death of close relative or serious illness of
(2) The zonal offices of the Bank shall monitor every person obtaining loans from the
Bank to ensure that loans are used for the purposes for which they were obtained.
13. Funds to be applied towards the disbursements of loans only
The funds given to the Bank for disbursement as loans under this Act shall be used
only for that purpose and shall not under any circumstances be diverted, vired or used for
payment of staff salaries or purchase of equipment or services.
14. Annual estimates, accounts and audit
(l) The Board shall cause to be prepared and submitted to the Minister not later than
30 September in each year an estimate of the expenditure and income of the Board during
the next succeeding financial year.
(2) The Board shall cause to be kept proper accounts and proper records in relation
thereto and when certified by the Board such accounts shall be audited within six months
after the end of the period to which they relate by auditors appointed by the Board from
the list and in accordance with the guidelines supplied by the Auditor-General for the
(1) The Board of the Bank shall submit quarterly reports on its activities.
(2) It shall be the duty of the Bank to prepare and submit to the President, not later
than three months after the end of each year, a report of activities of the Bank during the
immediate preceding year.
(1) The auditing of the Accounts of the Bank shall be completed not later than three
months after the end of each year by the Auditor-General for the Federation or an exter-
nal auditor appointed by him for that purpose.
(2) The audited accounts and the auditor’s comments and observations on the ac-
counts shall be submitted to the secretary to the Government of the Federation for onward
presentation to the President not later than six months after the end of each year.
The Board may, with the approval of the President, make regulations as may be nec-
essary for giving effect to the provisions of this Act; and in particular but without preju-
dice to the generality of the foregoing, it may make regulations-
(a) governing the granting of loans, advances and the making of deposits;
(b) regulating the relationship between the Bank and other financial institutions;
(c) prescribing the terms, conditions, rates of advances, credits and other transac-
tions which the bank may undertake, from time to time;
(d) prescribing forms of applications, agreements and other materials necessary
for the control of the grant of advances, credits, guarantees and any other
transactions which the Bank may undertake, from time to time;
(e) prescribing such other matters as may be incidental or supplemental to the
functions of the Bank under this Act.
(l) The provisions of the Banks and Other Financial Institutions Act shall not apply
to the Bank established under section 1 of this Act.
(2) The Bank shall be exempted from the payment of income and companies tax as
may be prescribed under any enactment relating to income tax or taxation of companies
19. Short title
This Act may be cited as the People’s Bank of Nigeria Act.
[Section 3 (3).]
Supplementary provisions relating to the Board
1. Subject to this Act and section 27 of the Interpretation Act, the Board may make standing
orders regulating the proceedings of the Board or any committee thereof.
2. Every meeting of the Board shall be presided over by the chairman and if the chairman is
unable to attend any particular meeting, a member may be appointed by the members present
to act as chairman for that particular meeting.
3. A quorum at a meeting of the Board shall consist of six members at least three of whom
shall be members appointed under paragraph (f) of section 3 (l) of this Act.
4. Where standing orders made under paragraph 1 of this Schedule provide for the Board to
eo-opt persons who are not members of the Board, such persons may advise the Board on any
matter referred to them by the Board, but shall not be entitled to vote at a meeting of the
Board or count towards a quorum.
5. Subject to its standing orders, the Board may appoint such number of standing and ad-hoc
committees as it thinks fit to consider and report on any matter with which the Board is con-
6. Every committee appointed under the foregoing provisions of this paragraph shall be made
up of such number of persons not necessarily members of the Board, as the Board may deter-
mine in each case.
7. The quorum of any committee set up by the Board shall be as may be determined by the
8. Where standing orders made pursuant to paragraph 1 of this Schedule provide for a commit-
tee of the Board to consist of or to eo-opt persons who are not members of the Board, the com-
mittee may advise the Board on any matter referred to it by the Board.
9. A decision of a committee shall be of no effect until it is confirmed by the Board.
10. The fixing of the seal of the Board shall be authenticated by the signature of the chairman
and of any other person authorised in that behalf by the Board.
11. Any contract or instrument which, if made or executed by any person not being a body
corporate, would not be required to be under seal, may be made or executed on behalf of the
Board by any person generally or specially authorised to act for that purpose by the Board.
12. Any document purporting to be a contract, instrument or other document duly signed or
sealed on behalf of Board shall be received in evidence and shall, unless the contrary is
proved, be presumed to have been so signed and sealed.
13. The validity of any proceedings of the Board shall not be adversely affected by-
(a) any vacancy in the membership of the Board; or
(b) any defect in the appointment of a member of the Board; or
(c) reason that a person not entitled to do so took part in the proceedings of the
No Subsidiary Legislation