Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans Article 4

The various types of unsound credit assets in the preceding articleare defined as follows:1.Those require "Special Mention" shall refer to those creditassets that have been evaluated as having sufficient collateraland on which the borrower's principal or interest payments havebeen in arrears for one (1) month to twelve (12) months; or thosecredit assets evaluated as unsecured and on which the borrower'sprincipal or interest payments have been in arrears for one (1)month to three (3) months; or those credit assets that have notyet come due or reached their maturity date, but the borrower ofwhich has other instances of poor creditworthiness.2.Those are "Substandard" shall refer to those credit assets thathave been evaluated as having sufficient collateral and on whichthe borrower's principal or interest payments have been in arrearsfor twelve (12) months or more; or those credit assets evaluatedas unsecured and on which the borrower's principal or interestpayments have been in arrears for three (3) months to six (6)months.3.Those are "Doubtful" shall refer to those credit assetsevaluated as unsecured and on which the borrower's principal orinterest payments have been in arrears for six (6) months to twelve(12) months.4.Those are "Losses" shall refer to those credit assets evaluatedas unsecured and on which the borrower's principal or interestpayments have been in arrears for twelve (12) months or more; orthose credit assets evaluated as impossible to obtain repayment.With regard to those credit assets to be repaid in installments byagreement in accordance with Article 7, Paragraph 2, the bank mayevaluate the assets in accordance with the borrower's solvency and thestatus of the collateral within six (6) months after the establishmentof a separate contract; these assets may not be classified as CategoryOne, however, and relevant corroborating evidence must be provided.