Retail loans once unpaid are segregated to different tears by time:
I. TIER....loan overdue 1-30 days, usually in Asia collected in-house (within bank)
II. TIER...loans overdue 30-90 days, are being watched as after 90 days they become a burden for the bank as NPL. Usually are are connected with additional fees and penalty interests. Still collected in-house (within banks)
III. TIER... loans overdue 90-180 days, already part of NPL. This is already an issue for the bank, as even a partial downpayment for the loan being overdue brings trouble to the bank, as whole loan falls down and consumer equity. Banks are under pressure and are allowed to use external agencies to activate the loan. This period is highly monitored by central bank & needs to be observed
IV. TIER....180 - 360 days. Loans are getting seriously problematic. If not solved they will be written off. Pressure increases.
V. TIER....360 days - 720 days. Loans are written off.
VI. TIER .... 720 days - 5 years. Loans are written off, but could be reactivated
VII. TIER.... 5 years and more. Bank doesnt care of this loans anymore and keeps proceeding with usual business
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