LOAN WORKOUT AND REMEDIAL MANAGEMENT

INTRODUCTION
Managing non-performing loans and distressed accounts is one of the most critical challenges for financial institutions. While lending is designed to generate revenue, failure to monitor and manage problem loans can quickly erode profitability and increase risk exposure.

This two-day programme is designed to provide participants with practical knowledge and skills to handle troubled loans effectively. It covers early identification of problem accounts, remedial strategies, recovery techniques, and legal considerations. Participants will learn how to protect institutional assets, minimize losses, and make informed decisions in the management of delinquent loans.
 

COURSE OBJECTIVES

By the end of this programme, participants will be able to:

• Understand the nature and causes of non-performing loans
• Identify early warning signals and monitor at-risk accounts
• Apply structured remedial and workout strategies
• Evaluate borrower options and recovery mechanisms
• Develop plans to restructure and recover distressed loans
• Navigate legal and regulatory frameworks affecting recovery
• Strengthen reporting, governance, and documentation practices
• Reduce credit losses through proactive remedial management

COURSE OUTLINE

MODULE 1: FUNDAMENTALS OF LOAN WORKOUT AND REMEDIAL MANAGEMENT
• Understanding distressed loans and non-performing assets
• Causes of loan default
• The role of remedial management in financial institutions
• Distinction between proactive and reactive recovery approaches

MODULE 2: EARLY WARNING SIGNS AND ACCOUNT MONITORING
• Identifying borrowers at risk
• Financial and non-financial early warning indicators
• Monitoring tools and techniques
• Escalation protocols for problem accounts

MODULE 3: CREDIT REVIEW AND ASSESSMENT OF TROUBLED ACCOUNTS
• Analyzing borrower financial health
• Evaluating cash flows, collateral, and repayment capacity
• Distinguishing technical vs. fundamental credit problems
• Preparing a structured credit review report

MODULE 4: REMEDIAL STRATEGIES AND WORKOUT PLANNING
• Restructuring loans to improve recovery
• Negotiation strategies with borrowers
• Repayment rescheduling and term adjustments
• Risk-based decision-making in remedial management

MODULE 5: RECOVERY TECHNIQUES AND COLLECTION METHODS
• Internal collection processes
• Out-of-court recovery methods
• Collaboration with legal and enforcement teams
• Practical approaches to maximize recoveries

MODULE 6: LEGAL AND REGULATORY CONSIDERATIONS
• Relevant laws and regulations affecting recovery
• Documentation and compliance requirements
• Legal remedies for defaulted loans
• Ensuring enforceability of recovery actions

MODULE 7: NON-PERFORMING LOAN CLASSIFICATION AND PROVISIONING
• Criteria for classifying troubled loans
• Provisioning and impact on financial statements
• Accounting and regulatory requirements
• Reporting to management and regulators

MODULE 8: PORTFOLIO RISK MITIGATION AND STRATEGIC MANAGEMENT
• Reducing future exposure to problem loans
• Monitoring sectoral and borrower concentrations
• Incorporating lessons from past defaults
• Strengthening credit risk frameworks

MODULE 9: REPORTING AND GOVERNANCE
• Designing effective remedial management reports
• Management oversight and review processes
• Escalation of critical accounts
• Governance practices for accountability and discipline

MODULE 10: CASE STUDIES AND PRACTICAL EXERCISES
• Real-world scenarios of loan workout and recovery
• Hands-on exercises in restructuring and negotiation
• Group discussions on complex credit situations