Baku, Azerbaijan, Jan. 16
By Emin Aliyev - Trend:
The Central Bank of Azerbaijan (CBA) has demanded that the country's banks tighten control over consumer loans.
The CBA sent a letter with instructions to the banks operating in the country to stop lending to the borrower without a work place reference, a source in the banking sector told Trend.
"This measure is aimed at preventing possible risks in the future. There is an approved procedure for issuing loans. This includes the necessity of submitting a certificate of employment. This paragraph has not been violated, but the CBA believes that control of its implementation was insufficient and banks were instructed to control compliance with the rules," the source said.
The interlocutor noted that the CBA's requirement is not associated with deterioration in the quality of bank loan portfolios, or growth of nonperforming loans (NPL).
"The quality of the largest banks' portfolios in the country is high. Simultaneously the debt burden is growing and it induces the CBA to respond with preventive measures. Though it can be said that in Azerbaijan this figure is much lower than in neighbouring countries, including Russia," he stressed.
In January-November 2013 Azerbaijani banks increased lending to the economy by 24.51 percent and in annual terms by 29.96 percent.
In the reporting period, Azerbaijani banks issued loans totalling 15,245.3 million manats, according to the CBA.
Overdue loans accounted for 795 million manats which is 5.21 percent of the total portfolio against 761.1 million manats, according to the results of January-November 2012. Statistics of overdue loans do not include overdue loans of Aqrarkredit non-bank credit organisations. Over 2013 overdue loans increased by 4.45 percent.
There are 43 banks in Azerbaijan.
The official exchange rate for January 16 is 0.7845 AZN/USD.
Translated by E.A.
Edited by S.M.
Follow us on Twitter @TRENDNewsAgency