No. The collapse of a bank does not automatically cancel the loan you owe.
When a bank fails, the Nigeria Deposit Insurance Corporation (NDIC) may step in as the liquidator, in accordance with the applicable banking and insolvency laws. One of the responsibilities of the liquidator is to recover money owed to the failed bank, including outstanding loans.
This means that if you have an unpaid loan with the bank, the debt does not simply disappear because the bank has stopped operating. The loan and the obligation to repay it can remain in force, although the institution responsible for managing or recovering the loan may change.
Where the applicable requirements are met, loan recovery may also involve the Central Bank of Nigeria’s Global Standing Instruction (GSI) framework. GSI can allow a qualifying financial institution to recover an eligible outstanding loan from funds in other bank accounts linked to the borrower’s BVN, subject to the applicable rules and procedures.
So, if a bank collapses, it is not a situation where the borrower can assume that the loan has disappeared. The debt may still be recovered by the appropriate authority or institution handling the failed bank’s assets.
The important point is simple: a bank’s failure does not, by itself, cancel the borrower’s obligation to repay a valid loan.
