According to research, Deposit Money Banks are recovering debts owed by chronic borrowers from their accounts in other banks in order to reduce the increase of non-performing loans in the industry.
According to data collected from the Central Bank of Nigeria and the National Bureau of Statistics, bank NPLs fell slightly from N1.2 trillion at the end of the second quarter of 2020 to N1.1 trillion at the end of July 2021.
Despite an increase in gross loans in the industry during the time, this is the case.
The CBN stated that the measures it implemented to reduce banking sector risks, such as the Global Standing Instruction, were assisting in the reduction of nonperforming loans in the industry.
The GSI, which began on August 1, 2020, allows banks to recover overdue principle and interest from any account held by the debtor across all financial institutions in Nigeria, according to the CBN.
The minor improvement, it added, was due to improved risk management techniques, the GSI policy, and regulatory forbearance that allowed banks to restructure COVID-19-affected credits. According to data acquired from the NBS on the banking sector for Q3 2020, although gross loans in the lending business was N18.9 trillion, total non-performing loans totaled N1.2 trillion.
The CBN’s newest numbers reveal that while gross loans increased to N22.2 trillion, nonperforming loans (NPLs) decreased slightly to N1.1 trillion.
The post Banks Start Deduction Of Loans From Accounts Of Chronic Debtors appeared first on GhGossip.