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CBN Considers Deducting Money from Loan Debtors’ Bank Accounts

CBN Considers Deducting Money from Loan Debtors’ Bank Accounts

The Central Bank of Nigeria -CBN has finalized plans to directly deduct loan defaulters under the Anchor Borrower Programme -ABP, as farmers keep ignoring their debt obligations.

This was announced by the CBN Senior Manager, Development Finance Office, Port-Harcourt, Celsus Agla, on Thursday, during a meeting with maize farmers and other stakeholders.

Agla added that certain farmers that got their loan through the Anchor Borrower Programme have ignored several appeals to repay, with some of them describing the loan as a grant. This has led the CBN into considering the Global Standing Instruction -GSI, which allows banks to deduct money from the accounts of the loan defaulters to settle their debt, 

However, Agla has said that the GSI will be the last resort to recover the overdue debt, 

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The statement read: “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.”

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