4.1 Performance Management
Effective from Jan 06 2020 - Jun 30 2020
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| i. | Banks should establish proper and well-defined performance matrices for Workout Unit staff that should not be based solely on the reduction in the volume of nonperforming loans; An appraisal system and compensation structures tailored for the NPL Workout Unit should be implemented and in alignment with the overall NPL strategy, operational plan and the bank’s code of conduct. |
| ii. | In addition to quantitative elements linked to the bank’s NPL targets and milestones (with a strong focus on the effectiveness of workout activities), the appraisal system should include qualitative measurements such as; level of negotiations competency, technical abilities relating to the analysis of the financial information and data received, structuring of proposals, quality of recommendations, and monitoring of restructured cases. |
| iii. | The importance of the respective weight given to indicators within the overall performance measurement framework should be proportionate to the severity of the NPL issues faced by the bank. |