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Banks Recover N50m.32m from Serial Debtors in 9 days with GSI

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Nigerian banks have within nine days of implementing the Global Standard Instruction (GSI) recovered N50.32 million loans from individual borrowers, Kevin Amugo director, financial policy and regulation, Central Bank of Nigeria (CBN) said on Tuesday.

GSI is essentially a mandate authorising recovery of due loan obligations from any and all deposit accounts maintained by a defaulting Borrower.

The CBN on July 13, 2020 issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector, effective from August 1, 2020.

Amugo spoke during the Chartered Institute of Bankers of Nigeria (CIBN) advocacy dialogue on ‘Non-Performing Loans (NPL) and GSI policy: impact and insight for financial stability’ held in Lagos via zoom.

Industry summary of the GSI activation as disclosed by Amugo showed that banks so far triggered a total of 26,057 bad debts with a total value of N1.67 billion between August 1 and 9, 2020.

The CBN is currently working on the protocols for GSI for non-individual and would soon release its operational guidelines.

Amugo also disclosed that the CBN has commenced the onboarding of mobile money operators unto the GSI platform.

The regulator said it has commenced onboarding of other financial institutions (OFIs) onto the Credit Risk Management System (CRMS) and thereafter to GSI platform.

Other financial institutions include Microfinance banks, Primary mortgage banks, development finance institutions and finance companies.

Adesola Adeduntan, managing director/CEO, First Bank of Nigeria, said it was a positive one with high prospect, to have recovered N50.3 million within a space of 9 days.

Represented by Olusegun Alebiosu, Chief Risk Officer at First Bank of Nigeria, Adeduntan said after one year the number of recoveries will increase.

He said banks are supposed to support customers access cheap funds by way of guarantees but the problem is trust.

“If the economy is to move ahead, trust environmentalist must be improved,” Adeduntan said during the panel session.

At its meeting on February 18, 2020, the Bankers Committee 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.

The Nigerian banking sector Non-performing loans ratio improved marginally to 6.4 per cent in June 2020, from 6.6 per cent in April 2020, though higher than 5 percent regulatory threshold.

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