CBN threatens to deduct money from loan debtors’ accounts

The Central Bank of Nigeria (CBN) has concluded on directly deducting loan defaulters under the Anchor Borrower Programme (ABP), as farmers ignore their debt obligation.

This was made known by the CBN Senior Manager, Development Finance Office, Port-Harcourt, Celsus Agla, on Thursday, in a meeting with maize farmers and other stakeholders.

Agla said some farmers that obtained loan through the Anchor Borrower Programme have ignored appeals to repay, and some describe the loan as grant. This has led CBN into considering the Global Standing Instruction (GSI).

The Global Standing Instruction allows banks to deduct money from accounts of loan defaulters to settle their debt, “the GSI is a system whereby if you have an account with any bank outside say Unity Bank and there’s money in that account;

Read also:CBN issues “no objection” to FBN Holdings’ acquisition of Access Pension

“because your BVN is attached to these loans if the GSI is triggered, the monies in those accounts can be collected to repay the loan to Unity Bank” he explained.

Although he said GSI will be the last resort to recover the overdue debt, “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.”

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now