Regulatory Alerts2019-07-03 | 51/2019Added · Updated
Bank of Albania Regulation on Out-of-Court Treatment of Distressed Borrowers by Banks
The Bank of Albania’s Supervisory Council has approved a regulation establishing a structured out-of-court framework for licensed banks to collaboratively resolve distressed borrowers. The rule mandates interbank cooperation agreements and a 90-day moratorium on unilateral legal actions, allowing banks to implement restructuring measures such as loan tenure extensions and debt-to-equity conversions without triggering immediate liquidation. It defines qualifying borrowers as those with cross-bank exposure exceeding ALL 250 million and defaults of at least 90 days, while requiring a majority vote representing 65 percent of total obligations to finalize binding resolution plans.
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