The Central Bank of Nigeria (CBN) has strengthened its policy on loan recovery to make it more effective and deter those who borrowed money from banks from reneging in payment.
The apex bank in the released operational guidelines on the Global Service Instructions (GSI) over the weekend, said the policy aimed at checking the spate of bad loans within the banking sector.
The Director, Financial Policy and Regulation Department of the CBN, Mr Chibuzo A. Efobi, in the circular, addressed to all Banks and other Financial Institutions pointed out that the move was in furtherance of the Bank’s mandate to promote financial system stability.
Mr Efobi stated that “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/wallets in the industry; improve credit repayment culture; and reduce non-performing loans in the Nigerian banking system.”
Consequently, he informed that the “frequency of recovery attempts via the GSI platform has been amended from a specific number to continuous and unrestricted”, and added, “in other words, the GSI automated loan recovery feature applicable to all loans in the industry shall remain perpetually in place throughout the life of the loan and/or until the loan is fully repaid.”
He urged those concerned to be guided accordingly by the circular and review the Guidelines, which is available on the CBN website.The GSI initiative was approved by the Bankers’ Committee at its meeting in February 2020, thereafter, the CBN collaborated with relevant stakeholders to develop necessary protocols to facilitate its implementation for eligible loans granted with effect from August 28, 2019.
Subsequently, the CBN released the circular on Operational Guidelines on the Global Standing Instruction (GSI} – Individuals, dated July 13, 2020; Red No: FPRD/DIR/GEN/CIR/07/056).
ADAPTED FROM TRIBUNE