CBN To Monitor, Stop Bad Debtors From Additional Borrowing
The Central Bank of Nigeria is planning to introduce a new mechanism, called the Global Standing Instruction, that will work with the Bank Verification Number of depositors to detect bad borrowers who refuse to pay their loans but plans to take another loan from other unsuspecting banks.
Information obtained by our correspondent revealed that the regulator planned to introduce the mechanism in 2019.
According to the apex bank, the GSI will bring out the credit history of any debtor who plans to borrow from any bank, and all Nigerian banks would be provided such information.
The mechanism, it was learnt, would make it impossible for any borrower to get another loan from another bank without first repaying all outstanding loans.
The apex bank revealed in its 2017 annual activity report that at the end of December 2017, the implementation of the BVN project recorded 31,426,091 registered BVNs and 43,959,282 accounts linked with BVNs, out of 66,974,029 active members.
It stated that the BVN was extended to other financial institutions to avoid a broken identity link in the banking system.
A deadline of December 2017 was given to customers of other financial institutions to have BVN.
The CBN stated that the committee on identity management and harmonisation of data met with all stakeholders to discuss acceptable data standards, minimum data fields and prevailing issues on the NIN-BVN harmonisation process.
The committee was set up to integrate identity data captured by different organisations, it added.
According to the report, the implementation of the BVN was deepened with the release of the framework for BVN and watch-list for the industry.
This was aimed at addressing incidence of fraud and other unethical practices to generate public confidence in the financial system.
It noted that the watch-list was a database of bank customers involved in confirmed fraudulent activities in the financial system.
The CBN also said that the Treasury Single Account payment gateway was modified with the introduction of the aggregator model to accommodate other key service providers for efficient service delivery and engender competition.