Regulations Governing the Procedures for Credit Cooperatives to Evaluate Assets and Deal with Non-performing/Non-accrual Loans Article 11

Any non-performing loans or non-accrual loans that, after subtracting the estimated recoverable portion, have one of the following circumstances shall be written off:1. The loan cannot be recovered in full or in part because the debtors have dissolved, gone into hiding, reached a settlement, declared bankruptcy, or for other reasons.2. The collateral and property of the primary/subordinate debtors have been appraised at a very low value or become insufficient to repay the loan after the subtraction of senior mortgages; or the execution cost approaches or possibly exceeds the amount that the bank might collect [from the debtor(s)] where there is no financial benefit in execution.3. The primary/subordinate debtor's collateral has failed to sell at successive auctions where the price of such collateral has been successively lowered, and there is no financial benefit to be derived from the bank's taking possession of such collateral.4. More than two (2) years have elapsed since the maturity date of the non-performing loans or non-accrual loans, and the efforts of collection have failed.A non-performing loan or non-accrual loan that has not been in arrears for more than two years but has not been recovered after collection efforts may be written off as bad debt after subtracting the recoverable portion.