BAKU, Azerbaijan, November 26. The Board of the Central Bank of Azerbaijan (CBA) has given the green light to the "Rules for managing credit risks in non-banking credit organizations (NBCOs)," Trend reports.
In this light, CBA Governor Taleh Kazimov has put pen to paper on a new decree.
According to the decree, daily loans provided by NBCOs must meet the following requirements:
- the loan must be issued in the national currency;
- the maximum amount of a single loan to a borrower is 500 manat ($294);
- the maximum daily interest rate is 0.3 percent;
- the maximum repayment period is 45 days;
- if late fees or penalties are applied, interest on the principal debt cannot be calculated for more than 30 days;
- the total amount of all payments to be made on the loan should not exceed 100 percent of the principal amount;
- interest on the principal debt cannot be charged for more than 30 days if late fees or penalties are applied;
- the loan should not be secured by real estate or movable property;
- the loan is not subject to restructuring.
The credit risk management policy must be approved by the Supervisory Board (Board of Trustees) of the NBCO in accordance with the NBCO’s risk appetite.
The credit risk management policy must include at least:
- the maximum size of loans granted to a borrower and a group of co-borrowers for each type of loan, as well as to individuals related to the NBCO, and the rules for assessing the borrower’s solvency.
- rules for assessing collateral, including criteria for selecting an external appraiser.
- rules for credit administration.
- rules for managing non-standard loans.
- reporting requirements.
The Department for Legal Support of Financial Markets has been instructed to ensure the submission of this decision to the Ministry of Justice of the Republic of Azerbaijan within three days for inclusion in the State Register of Legal Acts of Azerbaijan.
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