GSI, Special Tribunal to Boost Loan Recovery, Says Emefiele

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James Emejo and Sonia Mayomi in Abuja

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said the bank’s policy on Global Standing Instruction (GSI) and the special tribunal for loan recovery which was provided for in the Banks and Other Financial Institutions Act (BOFIA) 2020, would both accelerate credit recovery processes and enforcement of collateral rights.

He said these will also address the incidence of non-performing loans that had posed a great threat to the Nigerian financial system.

Emefiele, spoke at a workshop for judicial officers on recent reforms to enhance the resilience of the Nigerian banking and financial services sector – particularly the BOFIA 2020
He said the special tribunal for the enforcement and recovery of eligible loans was introduced in the Act to accelerate credit recovery processes and enforcement of collateral rights.

He said supervisory observance had indicated that recalcitrant debtors had exploited the non-prioritisation of credit recovery matters in the Nigerian judicial system to frustrate debt recovery efforts by financial institutions.

But he said CBN is currently informally engaging the key stakeholders in the judiciary to operationalise this provision.

Represented by the CBN Deputy Governor, Financial Systems Stability Directorate, Mrs. Aishah Ahmad, Emefiele said the BOFIA had further strengthened the Anti-Money Laundering and Combating Financing of Terrorism (AML/ CFT) Framework by mandating regulated entities to comply with AML/CFT and cybersecurity regulations.

Nevertheless, he said the Nigerian banking industry remained strong, stable and resilient and had continued to experience steady growth.

He said despite occasional shocks experienced over the last decade, the industry has remained a strong instrument for economic growth and development through granting of credit facilities to the real sector.

The CBN governor added that the sector had also been critical pass through for monetary policy measures and maintenance of world class innovative payment and settlement services.
He stressed that the Nigerian financial services sector had continued to witness rapid technological and digital innovation in products and service delivery channels and the legal/supervisory framework adjusts in response adding that the judiciary must keep abreast of these transformations.

Emefiele said it was important that the judiciary evolved to adopt digital transformations and consider the broader objective of fostering growth and economic development in order to creditably adjudicate cases within the financial sector.