The Central Bank of Nigeria (CBN) has issued operational guidelines on the Global Service Instructions (GSI), with the goal of reducing the number of bad loans in the banking sector.
The initiative was conceived to address recurring instances of willful loan default in the industry, according to a statement by Chibuzo Efobi, for the Director, Financial Policy and Regulation Department of the apex bank.
According to Efobi, the guidelines will improve the creation of a “watch list,” identify recalcitrant loan defaulters, and improve loan recovery from all eligible and funded accounts in the industry. He went on to say that it would also improve credit payment culture and reduce non-performing loans in Nigeria’s banking system.
“As a result, please be advised that the frequency of recovery attempts via the GSI platform has been changed from a specific number to an unrestricted and continuous number,” he said. He stated that the GSI automated loan recovery feature, which is applicable to all loans in the industry, will be in effect indefinitely, or until the loan is fully repaid.
He urged members of the banking public to review the guidelines on the CBN website, www.cbn.gov.ng. According to the News Agency of Nigeria (NAN), the Bankers’ Committee approved the GSI initiative at its February 2020 meeting. Following that, the CBN worked with relevant stakeholders to develop the necessary protocols to facilitate the implementation of the GSI for eligible loans granted beginning on August 28, 2019.