The Central Bank of Nigeria (CBN) has amended the operational guidelines on global standing instruction (GSI).
The GSI is a policy that allows banks to debit the accounts of loan holders in other banks to settle defaults.
In a circular dated January 19, 2022, the apex bank said the frequency of recovery attempts via the GSI platform will now be continuous and unrestricted.
The circular titled ‘Re: Global Standing Instruction (GSI) – Individuals’ was dated January 19, 2022 and signed by Chibuzo Efobi, CBN director, financial policy and regulation department.
“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,” the circular reads.
“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 CBN said the initiative was conceived to fundamentally address the recurring instances of willful loan default in the industry in order to identify and watch-list recalcitrant loan defaulters; enhance loan recovery from all eligible and funded accounts in the industry, and improve credit repayment culture.
The GSI became operational in August 2020 as part of efforts to reduce the rate of non-performing loans (NPLs) in the Nigerian banking sector. (The Cable)
