With this GSI, banks will be able to take money from other accounts in any bank in Nigeria to pay any debt being owed by such a person.
By Ibukun Emiola
Ibadan, July 17, 2020 Some financial experts have lauded the Global Standing Instruction (GSI) policy of the Central Bank of Nigeria (CBN), saying it will reduce the non-performing loans already on the increase in Nigeria.
The experts expressed the views in separate interviews with the News Agency of Nigeria (NAN) on Friday in Ibadan.
Mrs Lolade Adesola, a Financial Consultant at L. A. Consult, Ibadan, described the GSI as a very welcomed policy by the apex bank because of borrowers with fraudulent intentions.
“We know of borrowers who have money in one place and deliberately refuse to pay, just because the law says if money is in one name, another name cannot be used for repayment.
“But with this GSI, they will be able to take money from other accounts in any bank in Nigeria to pay any debt being owed by such a person.
“This is applicable, as we have an increased number of people who take loans, put the money in other banks and are then running their business,” she said.
Adesola said that this was what many people used to do while she was in the banking sector.
“People will get loans in one bank and refuse to pay back, and instead of paying money into their accounts that are in debt, they will go and open accounts other banks and be running them very well.
“So we are glad that a policy like the GSI has been formulated to cater for this lapse in the banking sector,” she said.
Adesola noted that the family members’ accounts were included in the policy, because most people opened accounts in the name of their family members.
“Although the policy ought not to have included family members’ accounts, we have, however, seen cases where people use family members’ names to open accounts, but they are the ones who sign cheques.
“I have seen a person, who brought out a cheque in someone else’s name and signed it, and the signature was exactly the one we had on the mandate.
“So people do all sorts of things and I am glad that they are being prevented from continuing such practices.
“You will see the account name of a minor with as much as N10 million and you will know the money in the account does not really belong to such a minor.
“Such money can definitely be used for repayment under the GSI, if it can be reasonably proven,” Adesola said.
According to her, the policy will make people think again before getting loans and make banks more comfortable to lend money to genuine businesses.