Section 20: Acquisition of Shares in Small and Medium Scale Industries, etc.

(1) Subject to the approval of the Bank, a bank may acquire or hold part of the share capital of any agricultural, industrial, private equity or venture capital company-
(a) subject to the private equity or venture capital company is set up for the purpose of promoting the development of indigenous technology or a new venture in Nigeria;
(b) subject to the shareholding of the bank is in small or medium-scale industries and agricultural enterprises as defined by the Bank;
(c) subject to the shareholding of the bank in any medium scale industry, agricultural enterprise or venture capital company or any other business approved by the Bank shall not be more than 10% of the bank’s shareholders’ funds unimpaired by losses and shall not exceed 20% of the paid-up share capital of the company or such other percentage as the Bank may prescribe;
(d) without prejudice to section 19(8)(b)(ii), and paragraph (c) of this subsection, the aggregate value of the equity participation of the bank in all enterprises shall not at any time exceed 20% of its shareholders' funds unimpaired by losses or such other percentage as the Bank may prescribe; and
(e) in the case of a non-interest bank, the activities of the agricultural, industrial, private equity or venture capital company shall be such as are permissible under non-interest banking principles.
(2) Subject to the prior written approval of the Bank, a bank may hold shares acquired in the course of the satisfaction of any debt owed to it, provided the shares acquired are not those of the bank’s subsidiary, holding company, associate or such other related party as the Bank may by regulation prescribe.
(3) Without prejudice to subsection (1), a bank may hold or acquire the share capital of any other business, subject to the approval of the Bank.
(4) Every bank shall, within 21 days of the acquisition of any shareholding pursuant to subsections (1) and (3), give full particulars thereof to the Bank.
(5) Any bank which fails to comply with the provisions of this section is liable to a penalty of not less than N5,000,000 and an additional penalty of N100,000 for each day during which the contravention continues.