Connect with us

    Hi, what are you looking for?

    E-Financial

    CBN Amends Operational Guidelines of GSI to Allow Limitless Loan Recovery

    Central Bank of Nigeria (CBN) has amended the operational guidelines of the Global Standing Instruction (GSI) to allow for continuous and unrestricted loan recovery by Deposit Money Banks (DMBs) and financial institutions in the country.

    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.

    The CBN in a circular titled: “Re: Global Standing Instruction (GSI) – Individuals,” dated January 19, 2022, signed by Chibuzo Efobi, CBN Director, Policy and Regulations Department, and addressed to all banks and other financial institutions, stated that following the amendment, the frequency of recovery attempts via the GSI platform had been altered from a specific number to continuous and unrestricted.

    The bank explained further that in effect, the GSI’s 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.

    The guideline contains lists of sanctions to be meted on banks and financial institutions in the event of violation or misapplication of the GSI.

    The apex bank stated further that the move was in furtherance of its mandate to promote financial system stability.

    The central bank had in July 2020, issued a guideline on the GSI, which was aimed at enhancing loan recovery and monitoring chronic loan defaulters.

    The initiative was fundamentally conceived to address the recurring instances of willful loan default in the industry with a view to identifying and watch-listing recalcitrant debtors, enhancing loan recovery from all eligible and funded accounts/wallets in the banking industry, improving credit repayment culture and reducing Non-Performing Loans (NPLs) in the Nigerian banking system.

    Spread the love
    Click to comment

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    ad

    You May Also Like

    Oil and Gas

    Leading oil and gas experts in Nigeria have called for the full adoption of digital technologies to overcome the complex challenges facing the country’s...

    News

    Russia’s Finance Ministry announced on Wednesday, September 24, that it plans to raise the country’s value-added tax (VAT) to help finance the ongoing war...

    Tech

    Lagos State has reaffirmed its position as Africa’s leading technology and innovation hub following the successful hosting of the GITEX Nigeria Tech Expo, Future...

    News

    The United States has reversed its visa restrictions on Ghana after the West African country agreed to accept west Africans deported by the United...