ABSTRACT
The Write-Off Ceiling Incentive Policy is part of the business policies of ABC Bank regarding debt collection. This policy was set in 2011 to reduce the number of Non-Performing Loans (NPLs). In addition, it also motivates account officers in all ABC Bank branch offices to collect the loans and achieve NPL recovery, including the written-off ones. However, this policy also faces certain risks in the banking sector. This study aims to investigate the risks affecting the effectiveness of the policy implementation in ABC Bank. This study was conducted through a series of interviews and a literature study in September 2020. The results showed that this policy deals with the following risks: (1) operational risk; (2) legal risk; (3) reputation risk; and (4) compliance risk. Therefore, the right risk treatment is required to manage each risk in order to increase the effectiveness of this policy on debt collection.
