Anchor Borrowers: CBN to deduct directly from defaulters’ accounts

The Central Bank of Nigeria (CBN) says it will deploy the Global Standing Instruction (GSI) against loan defaulters under the Anchor Borrower Programme (ABP).

The GSI is a policy that allows banks to debit the accounts of loan holders in their banks to settle defaults.

Celsus Agla, CBN senior manager, development finance office, Port-Harcourt, said this on Thursday during a strategic meeting with maize farmers and stakeholders from the south-south and south-east geo-political zone in Port-Harcourt, Rivers state.

Agla said the method of getting the loans would compel farmers who had accessed loans under the programme to invalidate their indebtedness to the bank after repeated appeals to them appeared to have fallen on deaf ears.

“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,” he said.

He said the CBN’s position came as a result of the belief of some farmers who accessed the loans under the ABP had become reluctant to repay their liabilities and even mistaken the credit facilities for grants.

Agla, however, said if the defaulters refuse or delay payment, “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; 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”.