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 2

In these Regulations, "non-performing credit" means the balance of guaranteed and endorsed credit that is in arrears more than three months past the maturity date, or not yet in arrears more than three months, but for which there has been legal action for recovery against the primary debtor and secondary debtor or disposal of collateral.Where a credit balance is restructured for repayment in installments, with annual payment of the principal and interest over 10%, and the maximum loan period shall be 5 years, and where performance has been carried out under the agreed terms for 6 months or more at an agreed interest rate not less than the rate on new underwritings of the same maturity by the bills finance company, the credit balance may be exempted from reporting as non-performing credit. Notwithstanding the preceding, when payments under the terms of the agreement again fall into arrears for over three months during the period of non-reporting, reporting shall resume."Maturity date" in paragraph 1 refers to the maturity date of commercial paper, provided that where a bills finance company makes a claim for early repayment in accordance with contract, the date thereby designated for repayment shall be the maturity date.