The Central Bank of Nigeria (CBN) has said banks recovered N50.32 million loans from individual borrowers within seven days of implementing the Global Standard Instruction (GSI).
The Director, Financial Policy and Regulation Department of CBN, Mr. Kevin Amugo, disclosed this at the Chartered Institute of Bankers of Nigeria (CIBN) virtual advocacy dialogue on ‘Non-Performing Loans (NPL) and GSI policy: impact and insight for financial stability’ held in Lagos yesterday.
The CBN on July 13 issued a guideline on Global Standing Instruction (GSI) to enhance loan recovery across the banking sector, effective from August 1, 2020.
Amugo said: “If you look at the performance of the GSI from August 1 to 9th, there are over 26,000 triggered with a cumulative value of over N1.66 billion.
“Recovery to date within that period was N50m. What this tells us is that even though there is a GSI that allows us to trigger, there is no 100 percent 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.
“These recoveries today may appear small, but it is not, because the bulk of the recovery will be made in the corporate account. What we have done is the first tranche of the GSI mandate which is for individuals.”
National officer and chairman of the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mrs. Margaret Orakwusi, applauded this but made the case during this COVID-19 period.
“While NACCIMA applauds the objectives of the GSI policy, it is very crucial to point out that the major reason for loan defaulting in Nigeria is unfavourable terms of payment that is high interest rates.
NACCIMA hereby advocates for reduction in interest rates, particularly during an unprecedented time such as this with emergence of COVID-19 pandemic globally.”
