Regulations Governing the Procedures for Credit Cooperatives to Evaluate Assets and Deal with Non-performing/Non-accrual Loans Article 12

The write-off of non-performing loans and non-accrual loans shall be approved by a resolution passed by the board of directors, and the supervisors shall be notified of the write-off. However, if so requested by the competent authority or a financial examination agency (organization), a loan shall be immediately written off with a report submitted to the subsequent board of directors' meeting, and the supervisors shall be notified the same. With regard to the provisions of the preceding paragraph, if a loan that exceeds the limits prescribed in Article 37 of the Credit Cooperatives Act to which Article 33 of the Banking Act applies mutatis mutandis is to be extended or written off (including cases where a stakeholder acts as the loan guarantor or provides the collateral), such decision requires the consent of at least three-fourths of directors present in a board meeting attended by at least two-thirds of all directors as well as the consent of all supervisors.