In a strategic move to fortify Nigeria’s financial sector, the Central Bank of Nigeria (CBN) has unleashed its weapon against loan defaulters through the potent Global Standing Instruction (GSI).
The CBN, in its circular titled ‘Re: Global Standing Instruction (GSI), Individuals,’ has mandated commercial and merchant banks to take decisive action against loan defaulters.
The GSI guidelines, initiated in July 2020 under Section 2 (d) of the Central Bank of Nigeria Act, 2007, have undergone a transformative amendment.
The circular emphasizes a shift from a specific number of recovery attempts to a continuous and unrestricted process.
The GSI, now a permanent fixture throughout the loan’s lifespan, stands as an automated loan recovery feature applicable across the banking industry.
This revolutionary approach aims to address wilful loan defaults, target chronic defaulters on watch lists, enhance recovery from eligible and funded accounts, and foster a culture of responsible credit repayment.
Initiated in August 2020, the GSI policy aligns with the CBN’s mission to curb non-performing loans in the banking sector.
Industry experts posit that this implementation has empowered banks, allowing them to expand their loan base with the solid backing of the CBN and the formidable GSI mechanism.
Beyond individual debt recovery, the GSI serves as a linchpin in promoting overall financial stability in Nigeria.
A critical component of the GSI initiative is the drive to improve credit repayment culture.
By curbing non-performing loans (NPLs) and creating a watchlist of consistent defaulters, the policy seeks to instil financial discipline, ensuring borrowers meet their obligations promptly.
To unlock the full potential of GSI, borrowers must link all their bank accounts to their Bank Verification Number (BVN) and National Identification Number (NIN).
