Chronic loan defaulter's accounts can now be debited
The Central Bank of Nigeria (CBN) has given approval to banks starting from 1st of August to debit chronic bank debtors account with other banks.
The CBN released the guidelines aimed at reducing non-performing loans in the banking sector and to monitor chronic loan defaulters. CBN issued a circular to all banks and other financial institutions tagged ‘Operational Guidelines on global standing instruction – Individuals.’ This guideline will take effect from 1st of August 2020.
This guideline will help banks recovery their money from debtors who have money in another banks but refused to pay back their loans. This means that loan defaulters who have funds in any type of account across any bank in the country should be expecting such accounts to be debited.
With the BVN, Nigeria Inter-Bank Settlement System will first recover the loans from the defaulter’s balance in any account within the bank. should it not be enough then it will proceed to other accounts deposited in other banks.
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