GSI: Banks notify customers of move to seize debtors’ funds

Commercial banks have notified customers of their readiness to seize debtors’ funds across the financial sector as the Global Standing Instruction (GSI) policy of the Central Bank of Nigeria (CBN) came into force on August 1,

The apex bank had on July 14 rolled out the GSI operational guideline that allows financial institutions access deposits of loan defaulters in other banks.

However, to ensure the public is carried along , some banks intimated their customers,  via e-mail notes, last week ahead its take-off.

One of the messages  read: “Dear customer! Trust you are staying safe. Starting from August 1, 2020, the new CBN Global Standing Instruction(GSI) policy guideline will take effect on all individual borrowing customers’ accounts in the financial industry.

“The policy allows your bank to recover the outstanding principal and interest upon defaulting from any/all accounts maintained by you across all financial institutions in Nigeria.

“The execution of the GSI mandate instruction, which is mandatory for every individual borrowing customer, authorises the bank, without recourse, to recover the outstanding sum.

“The guideline is aimed at facilitating an improved credit repayment culture, reduce non-performing loans and watch-listing constituent loan defaulters.

“We hope the information guides you in maintaining an appropriate repayment culture. Best regards.”

The GSI is limited to debt recovery only and is limited to only individual accounts. Although it can be used for recovery of repayment amount, the GSI cannot be used to recover any additional fees, charges or penal rate for default.

In a circular issued by the CBN Director, Financial Policy and Regulation Department, Kevin Amugo, the GSI is targeted at facilitating an improved credit repayment system, reducing non-performing loans in the Nigerian banking system and watch-listing consistent loan defaulters. The CBN, in collaboration with stakeholders, had last year developed the necessary protocols to facilitate a seamless implementation of the GSI process, including eligible loans granted from August 28, 2019. – The Sun.

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