To resolve the Non-Performing Loans (NPLs) problem, many Asian countries have started Asset Management Companies (AMCs). They basically adopted two kinds of models: Bank-based model and Government-based model. However, except for Korean Asset Management Company, many of them have not performed well and their recovery rate is also low. Short-term strategies to reduce the NPL level may actually increase them in the long run", says, Jack Roadman, a partner with Ernst & amp; Young's transaction advisory services.

Many Asian economies are suffering from NPLs problem. Their government didn't despair and to resolve the issue, bankers and central banks have taken constructive steps. "If 50% of your assets are NPLs, then out of desperation you will do anything," Rafael Bauenaventura, the governor of the Philippine Central Bank recently remarked.

To get rid of this problem, many governments have injected capital/cash in the ailing banks or established the AMCs. These AMCs took over the NPLs from banks by issuing bonds of agreed purchasing price. Different countries have used different models for constructing the AMC. There have been two principal models used for AMCs in Asia. These are Bank-based model and Government-based model.