Finance and banking activities are governed by rules and regulations which are reviewed from time to time to reflect the changing economic environment. Among some of the recent rules and statutes which govern the operation of the banks are the Central Bank of Nigeria Decree No. 24 of 1999 as amended; Bank and other Financial Institutions (BOFI) Decree No. 25 of 1991 as amended; the Dishonoured Cheque (Offenses) Decree of 1977; the Failed Bank (Recovery of Debt) Decree No. 18 of 1994 as amended; and the Money Laundering Decree No. 3 of 1995. The National Insurance Commission Decree No. 1 of 1997 and the Insurance Decree No. 2 of 1977 provide the regulatory framework for the operation of the insurance industry. Other rele vant laws which affect the operation of the financial system include: the Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree No. 17 of 1995; Nigerian Investment and Promotion Commission Decree No. 16 of 1995; and the Companies and Allied Matters Decree No 1 of 1990, which provides the legal framework for Unit Trust operations in the country.

The major regulatory/ supervisory authorities are the Federal Ministry of Finance (FMF), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Insurance Commis sion (NAICOM), Federal Mortgage Bank of Nigeria (FMBN), and the National Board for Community Banks (NACB). The CBN is at the apex of all banking institutions operating in the money market and has responsibility for controlling and supervising all commercial, merchant and community banks, the People's Bank, finance companies, discount houses, primary mortgage institutions, bureaux de change, and all development banks. This role has significantly influenced the development of the financial system, especially the money and capital markets. The CBN's regulatory/supervisory role for commercial and merchant banks is complimented by the Nigerian Deposit Insurance Corporation (NDIC).