Public-Owned Asset Management Company, missing link in the Financing System

Studies show that the share of non-performing loans (NPLs) in total banking facilities in Iran is beyond the international standards, and among of NPLs, the amount of bad and doubtful receivables is quite high. Regarding this, in recent years, many investigations attempt to address the ways of reduction of NPLs and to study the main reasons of cumulating this type of facilities in Iran in order to find probable solutions for this problem. Among others, one of the solutions that are under the focus of considerations is creating public-owned company which is called Asset Management Company (AMC). Creating AMC is often an after-the problem and not preventive treatment. However, as it has been successful in controlling and monitoring NPLs in some countries, it can be useful method to manage banking system lending strategies where the large amount of NPLs includes bad and doubtful receivables. The topic of this study is relatively new and hence in this study attempts are madeto provide literature review and to discuss the requirements, preconditions and difficulties of creating AMC in Iran.

Keywords:

None-Performing Loans , Bad and Doubtful Receivables , Public-Owned Asset Management Company , Asset Classification