CBN issues new guideline to aid loan recovery

The Central Bank of Nigeria (CBN) on Monday issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector, effective from August 1, 2020.

The guideline contains lists of sanctions to be meted on banks and Other Financial Institution (OFIs) in case of violation.

The Bankers Committee, at its meeting on February 18, 2020 approved the go live on the GSI. The objectives of GSI include to facilitate an improved credit repayment culture; reduce Non-Performing Loans (NPLs) in the banking industry; and watch-listing consistent loan defaulters.

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In a circular signed by Kevin Amugo, director, financial policy and regulation department, the CBN said it has in collaboration with stakeholders developed the necessary protocols to facilitate a seamless implementation of the GSI process, including eligible loans granted from August 28, 2019.

The GSI is expected to 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.

According to the guideline, where a Creditor Bank activates a Global Standing Instruction mandate in error (including when it is inconsistent with Prudential Guidelines), the creditor bank assumes all liability thereto. The erring creditor bank shall pay a flat fine of N500,000.00 per incident. Associated GSI charges borne by the creditor bank shall not be refundable.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.