Do you have a BANK ACCOUNT and also need a LOAN, then, it's important you see the NEW CBN guidelines

Do you have a BANK ACCOUNT and also need a LOAN? Then, it's important you see the NEW CBN guidelines.

If you have a bank account or bank accounts in any Nigerian Bank and you have taken a loan or, you have intention of taking a loan from the bank, it is essential for you thoroughly read the new Central Bank of Nigeria guildlines or policies, which was disclosed yesterday.

The Central Bank of Nigeria (CBN) yesterday, been monday, surprised bank loan defaulters with its new guideline or policy, which permits the forcibly withholding of the funds of the defaulters in any other bank accounts. 

Recall that the Asset Management Corporation of Nigeria (AMCON), had earlier released a shocking statement, which revealed that 105 Nigerians were owing almost Naira 4.5 trillion, which in return has been affecting the financial health of the Nigerian financial sector.  

According to the Central Bank of Nigeria's operational guidelines for Global Standing Instruction (GSI), it simply means that, financial institutions have been constitutionally empowered to have access to the funds or money of debtors that failed to payback at their dued time, which is in another bank from the 1st of August, 2020. 

The Global Standing Instruction, which is a mandate authorizing recovery of past due obligations from any and all deposit accounts maintained by a defaulter. The GSI is limited to debt recovery only and is limited to only individual accounts. Although it can only be used for recovery of repayment amount, the GSI cannot be used to recover any additional fees, charges or penal rate for default.

In a letter released by the Central Bank of Nigeria Director, Financial Policy and Regulation Department, Mr. Kevin Amugo, the GSI is aimed at making easier the developed repayment system, reducing non-performing loans in the Nigerian banking system and watch-listing consistent loan defaulters.

The Central Bank of Nigeria collaborated with stakeholders last year to develop the required protocols to make the implementation of the GSI process easier, which includes loans that were taken from August 28, 2019.

According to "Proshare Nigeria", "The guideline states that the GSI shall 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."

To achieve this, customer would have to fill in their BVN, Credit Risk Management System (CRMS) number, the full repayment amount, the loan duration and the repayment account. The GSI is being maintained by Nigeria Inter-Bank Settlement System Plc (NIBSS), which manages and oversees the Bank Verification Number(BVN) and also have the records of all bank accounts in the Nigeria.

According to the Global Standard Instruction(GSI), any time a someone that collected a loan fails to payback at the appopriate or due time, the GSI would be triggered with the creditor bank, which would activate the mandate on GSI Module specifying the recovery amount.

According to "Proshare Nigeria"; "Once the GSI is triggered, the available accounts for recovery are identified, available balances for the accounts are retrieved and funds from the accounts according to Recover Logic are recovered.", " Proshare Nigeria" concluded.

This is going to be a big disappointmen for anyone that is currently owing banks or any financial institutions loans that is been long overdued do repayment.

I am also sure that some individuals, especially the lower class or poor Nigerians would say this policy is not for them but, the rich people because they are the ones taking the loans, no, they are the ones banks give loans.

What do you think of this new policy by the CENTRAL BANK of NIGERIA?

Is this a good development or it is anothed way to witchhunt people?

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