*The Central Bank of Nigeria says the amended Global Standing Instruction’s automated loan recovery feature applicable to all loans in the financial industry will henceforth remain continually in place throughout the life of the loan and/or until the loan is fully repaid

Isola Moses | ConsumerConnect

The Central Bank of Nigeria (CBN) has amended the operational guidelines on Global Standing Instruction (GSI).

ConsumerConnect reports the GSI is a policy that allows banks to debit the accounts of loan holders in other banks to settle defaults.

The CBN stated this development in a circular titled ‘Re: Global Standing Instruction (GSI) – Individuals’, dated January 19, 2022, and signed by Chibuzo Efobi, Director, Financial Policy and Regulation Department of the Bank.

The Bankers’ Bank said the frequency of recovery attempts via the GSI platform would be continuous and unrestricted henceforth.

It is noted that the GSI became operational August 2020 as part of efforts at reducing the rate of Non-Performing Loans (NPLs) in the Nigerian banking sector.

The CBN circular stated: “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 apex bank explained the initiative was conceived to fundamentally address the recurring instances of wilful loan default in the financial industry 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.