The Central Bank of Nigeria (CBN) has stated that one of the aims of the Global Standing Instruction (GSI) is to watchlist consistent loan defaults.

This was disclosed in a circular issued yesterday to all banks and financial institutions, signed by the Director, Financial Policy and Regulatory Department, Mr. Chibuzo Efobi.

The apex bank also extended the Global Standing Instruction (GSI) recovery frequency for individuals from restricted to continuous and unrestricted.

What the CBN is saying

The circular reads in part: “In furtherance of its mandate to  promote financial system stability, the CBN released the circular on the Operational Guidelines of the Global Standing Instruction (GSI) – Individual  dated July 13, 2020.”

The CBN stated that the GSI was developed to address loan defaults and would create a watchlist for recalcitrant loan defaulters.

The apex bank said the initiative was conceived fundamentally to address the recurring instances of willful loan default in the industry to:

identify and watchlist recalcitrant loan defaulters;
enhance loan recovery from all eligible and funded accounts/wallets in the industry;
improve credit repayment culture and
reduce nonperforming loans in the Nigerian banking system.

The GSI automated loan recovery feature is applicable to all loans in the industry and would continue to the end of the loan.

“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 order 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,” the CBN added.

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