The Central Bank of Nigeria has issued guidelines on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector. This was contained in a circular released to all banks and other financial institutions tagged ‘Operational Guidelines on global standing instruction – Individuals.’ Based on these guidelines, a bank can recover its money from a loan defaulter’s funds in another bank in Nigeria.
According to the apex bank, the GSI shall serve as a last resort by a Creditor bank, without recourse to the Borrower, to recover past due obligations (Principal and Accrued Interest only, excluding any Penal Charges) from a defaulting Borrower through a direct set-off from deposits/investments held
in the Borrower’s qualifying bank accounts with participating financial institutions.
The GSI is expected to facilitate an improved credit repayment culture, reduce Non-Performing Loans (NPLs) in the banking industry and watch-list consistent loan defaulters.
The Nigerian Interbank Settlement Scheme (NIBSS) will manage the entire operations of the GSI on behalf of banks using customers’ Bank Verification Numbers (BVN)
The GSI will apply to the following accounts:
- Individual Savings Accounts;
- Individual Current Accounts;
- Individual Domiciliary Accounts;
- Investment/Deposit Accounts (N & Foreign Currency); and
- Electronic Wallets
The Bankers’ Committee had, on the 18th of February, 2020, approved the go-live of the GIS implementation.
