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ИД «Финансы и кредит»






Digest Finance

Methodological approaches to organization of retail NPL workout activities in the bank

Vol. 27, Iss. 1, MARCH 2022

Received: 4 September 2018

Received in revised form: 18 September 2018

Accepted: 2 October 2018

Available online: 30 March 2022

Subject Heading: Banking

JEL Classification: E51, F65

Pages: 4–26


Ruslan A. DOLZHENKO Ural State University of Economics (USUE), Yekaterinburg, Russian Federation


Subject. The article considers the activities of bank units dealing with non-performing retail loans workout.
Objectives. The aim is to develop methodological approaches to workout management of non-performing loans (NPL) of individuals, describe the basic business process and the role of all parties of the bank involved therein.
Methods. I employ the main methods of research, like abstract-logical, structural and functional. I also use results of works by foreign and Russian scientists on organization of activities with troubled assets in banks. The approaches to NPL workout were tested in a number of financial organizations of the Russian Federation.
Results. The paper describes conditions for classifying loans to the problem category, identifies key bank units dealing with NPLs, highlights the main steps of the workout procedure, and offers a matrix of debt settlement tools. It also presents algorithms and processes of dealing with debts in special cases: within the bankruptcy procedure and settlement of past due debt caused through the bank's fault.
Conclusions. The paper presents a tool that can be used by any financial institution to organize the effective work of its units with bad debts. The developed methodology is especially relevant for financial institutions planning to arrange workout activities in a consistent manner.

Keywords: credit, loan transaction, non-performing loan, past due debt, borrower


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ISSN 2311-9438 (Online)
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Vol. 27, Iss. 1
March 2022