By John Ikani
The Central Bank of Nigeria (CBN) has further spread its dragnet against loan defaulters, as it extends the Global Standing Instruction (GSI) recovery frequency for individuals from restricted to continuous and unrestricted.
The GSI creates a contractual mandate from an individual borrower, in favour of a creditor bank to apply monies standing to the credit of the borrower in a third-party financial institution or electronic wallet to offset the debt obligations of the borrower. It helps to facilitate improved credit repayment culture.
A circular (dated July 13, 2020; Ref No: FPRD/DIR/GEN/CIR/07/056) issued yesterday by the Director, Financial Policy and Regulatory Department, Mr. Chibuzo Efobi, indicated that the GSI would remain valid until such loans are fully recovered.
What the circular said:
“The initiative was conceived to fundamentally to address the recurring instances of willful loan default in the industry to: identify and watchlist recalcitrant loan defaulters; enhance loan recovery from all eligible and funded accounts/wallets in the industry; improve credit repayment culture and reduce nonperforming loans in the Nigerian banking system.
“Consequently, please be informed that the frequency of recovery attempts via the GSI platform has been amended from a specific number to continuous and unrestricted.
“In other words, the GSI automated loan recovery feature applicable to all loans in the industry will henceforth remain perpetually in place throughout the life of the loan and/or until the loan is fully repaid,” the circular said.
