Published 25 JULY 2024: A set of regulations governing the assignment and transfer of non-performing assets (NPAs) from financial institutions—banks and development financial institutions—to corporate restructuring companies (CRCs) has been released by the State Bank of Pakistan.
In their interactions with the CRC(s), the FIs must make sure that the transfer and assignment of NPAs is carried out in accordance with the terms of the Act, pertinent laws, rules, regulatory instructions (as amended from time to time), and FIs’ internal policies, procedures, and instructions in a fair, transparent, and prudent manner.
In accordance with FI’s policy for the transfer and assignment of NPAs, the FIs shall record the financial instruments received from the CRC(s) as consideration for the transfer and assignment of NPAs at the fair value that has been assessed and agreed upon by the two parties. For the first three (3) years following recognition, the FIs may continue to report financial instruments received from CRC(s) at the initial agreed-upon fair value.
