According to the apex bank, the GIS guideline was issued to enhance
loan recovery in the banking sector and to facilitate an improved credit
repayment culture; reduce Non-Performing Loans in the banking industry;
and watch-list consistent loan defaulters.
Accounts eligible for such seizure include individual savings accounts, current accounts, domiciliary accounts, investment /deposit accounts in both Naira, foreign currencies; as well as electronic wallets and joint accounts.
The statement read in parts;
“The GIS shall serve as the 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 deposit/investments held in the borrower’s qualifying bank accounts with participating bank accounts.”
While the Nigeria Inter-Bank Settlement System (NIBSS) and the apex
bank would be expected to work together for successful implementation of
the guidelines, it is expected that all banks must execute the GSI
Mandate Agreement with the NIBSS and ensure that all qualifying accounts
remain visible to NIBSS on the Industry Customer Accounts datab
Accounts of borrowers must be linked to their Bank’s Verification
Number (BVN), as failure to do so would attract such accounts being
watch-listed when discovered. It is also expected that all banks
will honour all balance inquiry and debit advice received from NIBSS for
GSI Trigger in accordance with master agreement including GSI recall
instructions.
Chief Executive Officers of banks have been directed to routinely update the Board of directors on the GSI process as it relates to frequency of use and amounts recovered or released, and banks have also been ordered to report regularly to the CBN on recoveries made through the GSI as well as releases made to other banks.
Any creditor that violates the guidelines would be made to take full liability and pay a flat fine of N500m per incident.
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