Banks Can Now Chase Your Debt Across Every Account You Own

A quiet but far-reaching policy by the Central Bank of Nigeria is changing how loans are recovered across the country, making it harder for borrowers to escape repayment once they default.

The policy, known as the Global Standing Instruction (GSI), allows banks to automatically recover overdue loans from any account linked to a borrower, not just the account used to take the loan.

This means that if a customer fails to meet repayment terms, the lending bank can move across the banking system to debit other accounts tied to the same individual.

At the centre of this system is the Bank Verification Number (BVN), which connects all of a customer’s accounts across different banks.

Once a loan goes bad, the BVN enables the creditor bank to trace and recover funds wherever they are held, including savings accounts, current accounts and even electronic wallets.

For many borrowers, this marks a shift from the past when unpaid loans could sometimes be avoided by simply moving funds to another bank. Under GSI, that option is effectively closed.

The system is designed to ensure that a borrower’s financial footprint is treated as one, regardless of where the money is kept.
Industry operators say the policy is typically used as a last resort.

Banks are expected to first engage customers and provide repayment options before activating GSI.

But once triggered, no fresh permission is required from the borrower, as consent is already embedded in the loan agreement.

The recovery also goes beyond the original amount borrowed. Accrued interest and other agreed charges can be deducted until the debt is fully cleared, subject to available funds in the linked accounts.

For the banking sector, the policy is part of a broader push to reduce non-performing loans and strengthen credit discipline.

By making it more difficult to default without consequences, regulators hope to build a culture where borrowers take repayment obligations more seriously.

For everyday customers, the message is straightforward. Taking a loan now comes with wider implications.

Defaulting on one facility could affect funds held across multiple accounts, making timely repayment not just advisable, but essential.