TIRANA, July 8 /ATA/- Tirana Approach is the latest project launched by the Bank of Albania aims at reducing the non-perform loans ratio to one-digit level in the country.
Economy expert Elvin Meka said in a recent interview with ATA that Tirana Approach represents the central bank’s final step as part of a major undertaking launched three years ago and is designed to fully reconstruct and curb the non-performing loans in the country’s banking system.
“Significant progress has been made as the non-performing loan ratio has fallen to 13.3 percent from a previous level at around 23 percent,” Meka said.
According to him, a large share of the non-performing loans portfolio has been restructured or written off from the banks’ sheets, providing banks and the entrepreneurship more opportunities to provide new loans.
Meka explains that the latest central bank’s platform Tirana Approach builds on the model of previous platforms and as such it represents the closing stage of non-performing loans’ restructuring on a broader basis. This will lead to the one-digit level of non-performing loans and will fuel crediting with direct impact on the country’s economy.
Tirana Approach project
The project foresees the establishment of a common platform among the commercial banks operating in the country and is designed to settle the issue of non-performing loans.
The project foresees that joint treatment of these cases by banks would take a mandatory form, while previously this was done in co-operation between banks, but without a mechanism that legally binds them to pursue this process up to the end.
According to BoA’s regulation, all commercial banks are obliged to engage in this common platform and the platform is granted the right of to supervise and to impose sanctions against non-cooperative banks.
The regulation proposed by the central bank has been forwarded for consultation to commercial banks and is expected to be approved within September.
According to Bank of Albania’s data, the ratio of non-performing loans fell 13.3 percent in the first half of this year, while the operational objectives aim to reduce it to the level of 10% by 2019.
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