Regulatory Alerts2021-09-21
Management of Workout and Collection Processes Involving Substantial Troubled Credits
The Supervisor of Banks issued Directive 314A to establish comprehensive guidelines for banking corporations managing substantial troubled credits, requiring the implementation of early detection systems and dedicated workout functions. The regulation mandates strict corporate governance structures, including Board oversight and senior management responsibility, while enforcing independence and specific qualifications for staff handling distressed assets. It further prescribes compulsory pre-troubled measures, systematic decision-making processes for assigning debts to specialized units, and rigorous economic and procedural standards for workout, collection, and liquidation strategies.
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