MNB, EBRD close talks with banks on corporate NPL resolution
The National Bank of Hungary (MNB) and the European Bank for Reconstruction and Development (EBRD) have wound up talks with local lenders on a set of best practice guidelines for out-of-court restructuring and consensual settlement of corporate non-performing loans (NPLs), the EBRD said today.
The non-binding draft recommendation, which the MNB is expected to issue by December, is "aimed at encouraging banks to adopt a more cooperative and coordinated approach where more than one financial creditor is involved," the EBRD said.
"The recommendation will encourage banks to consult and share information to the greatest extent possible and to agree to a standstill of any enforcement action to allow time for the restructuring of viable businesses," it added.
Banking industry insiders and the Hungarian Banking Association welcomed the MNBʼs support to develop the guidelines, and the association offered to develop further template documentation to set an industry standard. However, banking leaders agreed that Hungaryʼs Bankruptcy Act needs revision to support the guidelines.
The MNB and the EBRD agreed to continue talks with government ministries on improving the legislative framework for NPL resolution.
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