Regulations Governing the Procedures for Bills Finance Companies to Evaluate Assets, Set Aside Loss Reserves, and Handle Non-Performing Credit, Non-Accrual Loans, and Bad Debt Article 11

When any of the following circumstances applies to non-performing or non-accrual credit, the credit shall be written off as bad debt after deduction of the estimated recoverable portion:1. All or part of the debt is unrecoverable due to the dissolution, flight, settlement, or bankruptcy of the debtor or other reason.2. The debt cannot be repaid, or no financial benefit would accrue from execution after deduction of senior mortgages on the collateral and the property of the primary and secondary debtor.3. Where there no buyers for the collateral and the property of the primary and secondary debtor after being auctioned at successively lower prices, and their assumption would bring no financial benefit for the bills finance company.4. More than two years have elapsed since the maturity date of the non-performing or non-accrual credit and collection efforts have failed.Where less than two years have elapsed since the maturity date of non-performing or non-accrual credit and collection has not resulted in recovery, it may be written off as bad debt after deduction of any recoverable portion.Any uncollateralized non-performing or non-accrual credit shall be written off as bad debt within six months after the maturity date, provided that this requirement shall not apply when it can be proven that a claim against the property of the primary or secondary debtor would yield benefit.