In around six months, the banking industry will be facing a moment of truth: it will have to decide whether it will erase or not part of the book value of some packages or personal loans whose restructuring period is expiring and for which there are no chances of recovery within a reasonable timeline and worse, which will block the market, states Vladimir Kalinov, who has recently taken over the position of retail executive vice-president with Raiffeisen Bank, the third largest bank on the market in 2010.

"There will be a part of loans, which will have to be written down. It's impossible not to do this. We're speaking of personal loans in the case of which it's absolutely clear that if we were to insist for them to be paid, we'd take the repayment period to over 10-12 years. The indebtedness degree of clients involved is high and I do not know how and by how much their salaries could grow to allow for a smoother receivables recovery," says Kalinov, a former risk executive vice-president.

From clients' perspective, a write-down operation means part of the debt is wiped out so that the borrower can further pay the sum that is left.

In around six months, the banking industry will be facing a moment of truth: it will have to decide whether it will erase or not part of the book value of some packages or personal loans whose restructuring period is expiring and for which there are no chances of recovery within a reasonable timeline and worse, which will block the market, states Vladimir Kalinov, who has recently taken over the position of retail executive vice-president with Raiffeisen Bank, the third largest bank on the market in 2010.

"There will be a part of loans, which will have to be written down. It's impossible not to do this. We're speaking of personal loans in the case of which it's absolutely clear that if we were to insist for the