Regulations Governing the Procedures for Credit Cooperatives to Evaluate Assets and Deal with Non-performing/Non-accrual Loans Article 5

A credit cooperative shall evaluate credit assets on and off balance sheet in accordance with Articles 3 and 4 herein, and shall allocate sufficient loan loss provision and reserves against liability on guarantees. The minimum loan loss provision and guarantee reserve shall be 1% of the outstanding balance of Category 1 credit assets (excluding assets that represent claims against ROC government agencies, including central and local governments), 2% of the outstanding balance of Category 2 credit assets, 10% of the outstanding balance of Category 3 credit assets, 50% of the outstanding balance of Category 4 credit assets, and 100% of outstanding balance of Category 5 credit assets.To strengthen the ability of credit cooperatives to bear the loss of specific credit assets, the central competent authority may, if deemed necessary, require credit cooperatives to raise loan loss provision and guarantee reserve for specific credit assets.