The Central bank of Nigeria has adjusted the operational guidelines on global standing instruction (GSI) giving banks power to continuous and unrestricted loan recovery.
This was announced by the apex bank in a circular titled “Re: Global Standing Instruction (GSI) – Individuals,” dated January 19, 2022.
The circular signed by Chibuzo Efobi, CBN Director, Policy and Regulations Department, was issued to all banks and other financial institutions.
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“Consequently, please be informed that the frequency of recovery attempts via the GSI platform has been amended from a specific number to continuous and unrestricted,” the circular reads.
“In other words, the GSI automated loan recovery feature applicable to all loans in the industry will henceforth remain perpetually in place throughout the life of the loan and/or until the loan is fully repaid.”
The GSI, which became operational in August 2020, is a policy and a means of last resort available to a Bank if a customer defaults on their loan. It that allows banks to debit the accounts of loan holders in other banks to settle defaults.
By implication, if you borrow a loan from Bank A and you’re unable to pay or your default while having enough in Bank C, Bank A has the right to remove the loan form your account in Bank C.