CBN Targets Loan Defaulters

The Central Bank of Nigeria (CBN) said over the weekend that it intends to place bank accounts of persons who have collected loans but have refused to honor terms and agreements on its watch list.

CBN made the announcement in a new set of operational instructions for the Global Standing Instructions (GSI), which it posted on its website.

The GSI aims to reduce the number of problematic loans in the banking sector.

The effort was created to combat reoccurring instances of wilful loan default in the business, according to the guidelines signed by Chibuzo Efobi, for the Director, Financial Policy and Regulation Department of the apex bank.

According to Efobi, the recommendations will improve the creation of a “watch list,” identify stubborn loan defaulters and improve debt recovery from all eligible and funded accounts in the business.

He went on to say that it will help promote credit payment culture and minimize non-performing loans in Nigeria’s banking system.

“As a result, please be advised that the frequency of recovery attempts via the GSI platform has been changed from a specific number to an unrestricted and continuous number,” he stated.

He stated that the GSI automated loan recovery feature, which is applicable to all loans in the industry, will be in effect indefinitely, or until the loan is entirely repaid.

He asked members of the banking public to review the instructions on the CBN website.

The Bankers’ Committee endorsed the GSI plan at its February 2020 meeting.

Following that, the CBN worked with important partners to construct the appropriate procedures to allow the implementation of the GSI for qualified loans granted after August 28, 2019.