OPERATIONAL GUIDELINES ON GLOBAL STANDING INSTRUCTION (GSI) - INDIVIDUAL
Guideline · Finance
Guidelines establish a system for banks to recover loan funds from defaulting borrowers' accounts across institutions with prior consent. They target individual loan customers and financial institutions. This reduces non-performing loans and improves credit access.
OPERATIONAL GUIDELINES ON GLOBAL STANDING INSTRUCTION (GSI) - INDIVIDUAL
What Is This Policy?
CBN guidelines establishing the Global Standing Instruction mechanism enabling banks to automatically recover loan funds from a defaulting borrower's accounts across all banks in Nigeria, with the borrower's prior consent.
Who Does It Target?
Individual bank loan customers All CBN-licensed banks and financial institutions The CBN as the GSI regulator NIBSS (Nigeria Inter-Bank Settlement System) as the GSI operator
What Does It Aim to Achieve?
Reduce non-performing loans in the banking system, improve credit discipline among borrowers, and make credit more accessible by reducing lenders' default risk.
Key Features
Consent-Based: Borrowers sign a GSI mandate at loan origination authorising banks to recover outstanding amounts from any of their accounts. Cross-Bank Recovery: Upon default, the lending bank may instruct NIBSS to sweep funds from the borrower's accounts at other banks to recover the debt. BVN Linkage: The GSI system uses the borrower's BVN to locate all accounts across the banking system. Ethical Use: Strict rules govern when and how GSI may be invoked, preventing abuse.
Current Status
Rollout Stage: Active - all banks enrolled in GSI Coverage: Nationwide banking system Beneficiaries: Banks through reduced NPLs; creditworthy borrowers through improved credit access Funding: NIBSS transaction fees
How to Access
GSI mandate signed at loan origination is automatically linked to all accounts by BVN Borrowers should be informed of GSI terms before signing Dispute resolution available for improper GSI activations Application method: GSI is automatically activated by banks upon loan origination. Disputes: contact your lending bank or CBN.
Important Terms
GSI can sweep accounts at any bank holding the borrower's funds Borrowers should maintain repayment discipline to avoid GSI activation Only accounts in the borrower's own name are subject to GSI; joint accounts have additional protections
Official Resources
Website: https://www.cbn.gov.ng Contact: Central Bank of Nigeria (CBN) / NIBSS
Legal Framework
Issued under the Central Bank of Nigeria Act 2007 and the Banks and Other Financial Institutions Act 2020, which empower the CBN to issue operational guidelines for banks. Operates alongside the CBN Consumer Protection Framework, the Banking Regulation on credit recovery, and the Administration of Criminal Justice Act 2015.