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Azerbaijan simplifies reserves creation norms for banks

Economy Materials 7 January 2016 10:47 (UTC +04:00)
The Central Bank of Azerbaijan has changed the reservation rates for poor and risky assets of banks.
Azerbaijan simplifies reserves creation norms for banks

Baku, Azerbaijan, Jan. 7

By Anvar Mammadov - Trend:

The Central Bank of Azerbaijan has changed the reservation rates for poor and risky assets of banks.

In order to neutralize the impact of macroeconomic risks on the banking sector within the framework of countercyclical prudential regulation of the sector and support for financial stability, the central bank has lowered the reservation rate for poor assets to 25 percent, and the reservation rate for risky assets - up to 50 percent.

Previously, the reservation rate for poor and risky assets was 30 percent and 60 percent, respectively.

At the same time, the rate on satisfactory assets amounts to one percent, restructured controlled assets - two percent, non-restructured controlled assets - one percent, and irredeemable assets - 100 percent.

In addition, the Central Bank of Azerbaijan has amended the rules of restructured assets classification.

Classification of assets is determined by the table below.

Overdue period

0-30 days

31-90 days

91-180 days

181-270 days

Over 270 days

Quality criteria

High quality

Satisfactory

Controlled

Unsatisfactory

Unsafe

Irredeemable

Average quality

Controlled

Unsatisfactory

Unsafe

Irredeemable

Irredeemable

Low quality

Unsatisfactory

Unsafe

Irredeemable

Irredeemable

Irredeemable

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