Regulatory Alerts2021-09-30
Management of Workout and Collection Processes Involving Substantial Troubled Credits
The Banking Supervision Department issued Proper Conduct of Banking Business Directive no. 314A to mandate that banking corporations establish specialized, independent functions for managing substantial troubled credits. The directive requires robust corporate governance, early detection of credit deterioration through qualitative and quantitative indicators, and the integration of risk officers into decision-making processes. It further prescribes systematic procedures for assigning debts to dedicated units, implementing workout strategies, and conducting post-failure reviews to maximize collections and minimize losses.
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