In a related development, the Monetary Board (MB) also recently approved the guidelines that would allow banks to enter into Joint Venture Agreements (JVA) with property developers to provide an  BIS Review 25/2006  1  additional channel for banks to reduce their NPA holdings by helping convert bad assets into readily marketable or income producing assets.
However, to prevent abuses, certain safeguards were adopted. In the first place, all JVAs under the program are subject to prior MB approval. Only pre-existing non-performing assets are eligible under the program to guard against potential moral hazard. Banks are also prohibited from providing funds to the joint venture either as a loan or capital contribution.