Azerbaijan, Baku, 10 Dec /corr. Trend I.Khalilova / "Together with the Government, the National Bank of Azerbaijan (NBA) develops extended program of preventive control in order to ensure protection against the global financial crisis," Rashad Orujov, Director of NBA department for control on activity of credit organizations, said on 10 Dec.
"It envisages continuing preventive measures, commenced by the NBA since the
end of 2007," said Orujov. The program is expected to be adopted soon".
The NBA has taken preventive measures, providing banking system with AZN 350mln additional liquidity, under conditions of the world financial crisis to regulate liquidity in Azerbaijan.
Early Oct in 2008, refinancing rate was cut from 15% to 8% annual, norms of obligatory reservation on banking liabilities were cut from 12% to 6% both in national and foreign currency and norms of obligatory reservation on foreign liabilities - from 5% to 0.
The NBA took measures on prudential regulation to raise level of financial security in the banking sector in 2008. Under these measures, the NBA toughened rates on classification of assets: rates rose from 6% to 10% on the controlled assets, inadequate assets - from 25% to 30% and on unsafe assets - from 50% to 60%. Moreover, demands for ensuring real estate through loans rose from 120% to 150% and maximum amount of subordinated debt in capital of the first level was limited, which will be to 50%.
"Over the last 15 years, the banking sector of Azerbaijan grew more than 10 times and this caused concerns of the NBA as a regulatory
organ because of the increasing risks. Therefore, the NBA was forced to toughen
up prudential norms," emphasized Orujov.
At present the dynamics of increase in the banking sector of the country
stabilized, and the NBA called the banks to assess the number of credit
products and carry out more conservative policy. As a result, in
September-October the credit investments of the banks grew by seven percent,
whereas the crediting of trade and services - nine percent. Despite this, only
in October the banks provided new credits totaling AZN 450-500mln.
Current rate on 10 Dec is 0.8072 AZN/USD
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