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Business News of Saturday, 29 January 2022


CBN swoops on loan defaulters, mandates banks on total recovery

Central Bank of Nigeria Governor, Mr. Godwin Emefiele Central Bank of Nigeria Governor, Mr. Godwin Emefiele

In a deft move to reduce commercial banks’ Non Performing Loans (NPLs), the Central Bank of Nigeria (CBN) has reminded them to apply the full dictates of the Global Standing Instruction-Individuals (GSI) on recalcitrant debtors as a way of guaranteeing a healthy financial ecosystem.

In a circular dated January 19, 2022 and signed by CBN’s Director, Financial Policy and Regulation Department, Chibuzo Efobi, said the operational guidelines on the Global Standing Instruction (GSI) —Individuals (dated July 13, 2020; Ref No: FPRD/DIR/GEN/CIR/07/056), 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.

The circular said further: “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 shall remain perpetually in place throughout the life of the loan and/or until the loan is fully repaid. Please be guided accordingly and review the guidelines”.

Banks recorded non-performing loans of N1.3 trillion as of November 2021, which was above the industry benchmark, according to the CBN.

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