The guidelines set out below a set of generic principles that banks are encouraged to follow and adopt as part of their culture in relation to restructuring activities. These principles include, but are not limited to:
i.
Restructuring activities should not be viewed as a cost center. Restructuring measures can allow the banks to maximize their recovery and maintain a good and long-term relationship with their borrowers.
ii.
Restructuring can allow the borrowers to survive and potentially return to a sustainable and growth path that would benefit the borrower, the economy and the banks.
iii.
If banks are effective in identifying early warning signs, addressing the issues and engaging in early restructuring solutions, this could prevent long-term default and losses and result in higher profit for both banks and borrowers.
iv.
Restructuring should be done in utmost good faith and both banks and borrowers should show seriousness and commitment to lead a successful process.
v.
Negotiations must be in the best interest of the borrower and the bank.
vi.
Transparency and regular communication should take place between various stakeholders in a restructuring situation.
vii.
Transparency and full disclosure of information, when appropriate, should take place between the borrower and the banks to ensure both parties can make informed decisions for the best interest of both parties.
viii.
The banks should aim to provide a prompt response to the borrower's proposal for a restructuring solution.
ix.
The borrower shall have reasonable and sufficient time to provide the requested information and consider the restructuring proposal.
x.
Banks and borrowers should seek sustainable solutions and avoid repeated short-term fixes.
xi.
Confidentiality should be respected throughout the process.
xii.
Consensual but sustainable out-of-court restructuring solutions are considered the best and most favorable outcome when it comes to restructuring. Banks are expected to exhaust all consensual options before deciding to follow a court-led process or enforcing on securities.
