CBN Proposes Mediation Panel for Loan Disputes, Sets 90-Day Resolution Timeline

CBN has proposed mediation panel for loan disputes and set 90-day resolution timeline.

 

NewsOnline Nigeria reports that the Central Bank of Nigeria (CBN) has proposed the creation of a Mediation and Dispute Resolution Panel (MDRP) as the first point of contact for resolving loan-related disputes, in a move aimed at reducing reliance on courts in secured lending transactions.

 

The proposal was outlined in a circular issued on Tuesday, inviting stakeholders to review and comment on draft guidelines for the panel under the Secured Transactions in Movable Assets (STMA) framework.

 

Signed by the Acting Director of the Development Finance Advisory Department, P. I. Oluikpe, the circular stated that the panel would have initial jurisdiction over disputes arising from the implementation of the STMA Act.

 

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“The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first instance jurisdiction to hear and determine any dispute arising from the operation and application of the Act,” the apex bank said.

 

According to the CBN, the initiative is designed to strengthen Nigeria’s financial ecosystem by providing a specialised, cost-effective platform for resolving disputes tied to loans secured with movable assets.

 

The framework is anchored on the Secured Transactions in Movable Assets Act, 2017, which establishes mediation as the first recourse for disputes between creditors and borrowers.

 

The proposed guidelines aim to promote transparency, fairness, and efficiency in dispute resolution while boosting investor confidence in asset-backed lending.

 

Under the draft, the panel will adopt alternative dispute resolution mechanisms focused on preserving business relationships and ensuring faster outcomes. Decisions are expected within 90 days from the first hearing.

 

Parties seeking redress must consent to the panel’s jurisdiction and demonstrate prior efforts to resolve disputes informally through negotiations before escalation.

 

Eligible disputes must involve a valid security agreement, include a mediation clause, and be registered with the National Collateral Registry.

The MDRP will consist of 30 professionals drawn from law, banking, finance, and dispute resolution, each with at least 10 years’ experience. Panels of three members will be constituted on a rotational basis and supported by a secretariat responsible for case management and documentation.

 

Proceedings may be conducted physically, virtually, or through a hybrid format. The panel’s decisions will be legally binding and enforceable in court as consent judgments, although parties may appeal on limited legal grounds within specified timelines.

 

The guidelines also emphasise strict confidentiality of mediation proceedings, while funding for the panel will come from CBN subventions, administrative fees, and other contributions.

 

The apex bank has invited stakeholders to submit comments on the draft guidelines by October 9, 2026, as part of its consultative policymaking process.

 

The development follows a recent directive by the CBN restricting access to banking services for large borrowers with non-performing loans, including those listed in the Credit Risk Management System or private credit bureaus, as part of efforts to strengthen credit discipline and reduce loan defaults in the banking sector.