Within seven working days after the Global Standing Instruction (GSI) became effective, commercial banks in the country have been able to recover N50.32 million from individuals who defaulted in repaying their loans.
This was revealed by the director, financial policy and regulation, Central Bank of Nigeria (CBN), Mr Kevin Amugo, during a webinar discussion with key industry experts and analysts dialogue where the issue on “Non-performing Loans and Global Standing Instruction (GSI) Policy: Impact and Insights for Financial Stability.”
According to Amugo, over 26,057 GSI with a value of N1.660 billion had been triggered on individual accounts within between Saturday, August 1 2020 when the policy became effective and Sunday, August 9, 2020.
The CBN, on July 13, 2020, issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector.
“If you look at the performance of the GSI from 1st to 9th of August, 2020, there are over 26,000 triggered with cumulative value of over N1.66 billion. Recovery to date within that period was N50 million. What this tells us is that even though there is a GSI, that allows us to trigger, there is no 100 per cent certainty that what is triggered must be recovered but the good thing about it is that there is no hiding place again for the predatory borrower,” he pointed out.
On his part, the chief risk officer, First Bank Nigeria, Olusegun Alebiosu said: “if the economy must move ahead, the trust environment must be fixed and that is one of the reasons the GSI is among the first conversations. The bankruptcy law need to be brought up and it needs to be punitive and we need to have economic court. You can just be claiming fundamental human rights when you have outstanding loans. These are realities that we have to face.”
Global Standing Instruction, seeks to achieve three objectives, reduce rates of unserviced loan, improve loan recovery effort and promote responsible borrowing in the banking industry. The NPL trend in the banking industry from December 2010 to December 2019, you would see that the NPLs is like a frequency cycle and no regulator likes this trend.
National officer and chairman maritime trade group, the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mrs Margaret Orakwusi, said : “As the voice of Nigerian businesses, NACCIMA is of the opinion that the GSI policy has the capacity to promote a stable financial system and enhance loan recovery across the Nigerian banking sector if properly implemented.”
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