The accumulation of non-performing loans (NPLs), particularly large-scale credit exposures, has posed significant structural challenges to the stability of Iran's banking system. In Iran, pursuant to the Seventh National Development Plan Act, the Banking Network Asset Management Company was established with the primary mandate of enhancing the productivity, marketing, and disposal of surplus assets held by distressed banks. Nevertheless, an examination of the Company's approved Articles of Association reveals that no explicit or direct mandate has been assigned to the resolution of non-performing loans within the banking system. Adopting a descriptive–analytical methodology and a comparative legal approach, this study examines the feasibility of expanding the legal mandate of Iran's Asset Management Company to encompass the resolution of non-performing loans in the banking sector. The findings of this study indicate that the effective implementation of such a mandate requires reforms to the existing legal framework, together with the establishment of appropriate statutory powers and institutional mechanisms. In this regard, the study emphasizes the need to: (i) establish a clear legal framework for the transfer of non-performing loans from credit institutions to the Asset Management Company; (ii) develop a specialized valuation framework for non-performing loans based on both economic and legal criteria; (iii) strengthen corporate governance arrangements and establish effective mechanisms for the management, restructuring, and disposal of distressed loans and impaired assets; (iv) utilize the capacity of specialized courts to enhance the efficiency of adjudicating disputes relating to bank claims.