The Central Bank of Nigeria (CBN) over the weekend announced plans to place on its watch list the bank accounts of people who collected loans and refused to honor terms and agreements.
CBN disclosed this in new Global Standing Instructions (GSI) operational guidelines that it posted on its website.
The GSI aims to control the wave of bad debts within the banking sector.
According to the guideline signed by Chibuzo Efobi, for the director of the financial policy and regulation department of the apex bank, the initiative was designed to address the recurring cases of deliberate default in the industry.
Efobi said the guidelines would improve “watchlisting” and identify stubborn defaulters and improve loan recovery from all eligible and funded accounts in the sector.
He added that it would also improve the culture of paying on credit and reduce non-performing loans in the Nigerian banking system.
“As a result, please note that the frequency of recovery attempts through the GSI platform has been changed from a specific number to a continuous, unrestricted number,” he said.
He said GSI’s automated loan recovery feature applicable to all loans in the industry will remain in place perpetually for the life of the loan or until it is fully repaid.
He urged members of the banking public to check the CBN’s website for the guidelines.
The GSI initiative was approved by the Bankers Committee at its February 2020 meeting.
The CBN then worked with relevant stakeholders to develop the necessary protocols to facilitate the implementation of the GSI, for eligible loans granted on or after August 28, 2019.