MANILA - The Securities and Exchange Commission (SEC) has released to the public on Friday the draft implementing rules and regulations (IRR) of a newly passed law that will help banks and financial institutions manage risk from piling bad loans amid the COVID-19 crisis.
The Financial Institutions Strategic Transfer or FIST Act allows banks and financial institutions to dispose of non-performing assets (NPAs) or "bad loans" through selling them to "FIST corporations."
The draft IRR contains the guidelines on the creation of FIST firms that will invest in or acquire bad loans.
It has inputs from the Bangko Sentral, Bureau of Internal Revenue, and the National Economic and Development Authority, and has been released for public comments.
Non-performing or bad loans were described as unpaid loans for at least 90 days after they were due, or after they default under the loan agreement.
Source: ABS-CBN News
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