Non-Performing Loan Management in SE Europe


GBRW recently delivered a detailed manual to the Delinquency Management Department of a major commercial bank in South East Europe. The manual set out the policies and procedures for the bank to follow from the initial default of the loan, the methodology for resolving that default or failing that the procedures for handling and closing a continuing default. The manual included the procedures for transferring responsibility for the resolution of the Non Performing Loan, the policy on the build up of provisions and the final write off of the loan.

The challenge was to develop a policies and procedures that could be easily understood and implemented by the staff of the bank which at the same time conformed to the regulatory requirements of the central bank, the instructions for handling bad debt from the Head Office of the bank (the bank was foreign owned) and best international practice.

To assist staff in implementing the policy a series of guidance notes were also provided as the underlying objective was to take responsibility for and resolve problem loans in as short a timeframe as possible at minimum cost to the bank.

The manual was approved by the Board of Supervision of the bank, the Board of Directors at the Head Office of the bank and the domestic regulatory authority and is in full effect.