Azerbaijan, Baku, Nov. 29 / Trend N. Ismayilova /
The Central Bank of Azerbaijan (CBA) will soon decide on the issue of creating housing and construction banks, head of the CBA Legal Department Rana Malikova said today.
"The CBA previously prepared a draft law on housing and construction banks, and submitted it to the Presidential Administration," she said. "But the crisis hitting the world market did not allow us to implement this project as these systems cannot be implemented in any situation. They have to be implemented only in a trustworthy situation from an economic point of view and also be attractive for investors."
Therefore, she said, the project earlier had been postponed. However, today, the world is seeing reduced tensions after the crisis. The CBA is now working to make this alternative form of lending more active.
"We are working with experts from Germany," she said. "We have been provided with expert help through the German KfW Development Bank. We intend to decide on if such a project should put forward and to either create this system or to wait."
Housing and construction banks will provide a social direction for mortgage and housing lending. To accelerate the process of issuing loans, registration will be conducted via the "single-window" principle and e-registration system.
The project would envisage the creation of housing and construction banks as separate institutions. The CBA's prudential requirements, which are put forward in the banking sector, will be discussed separately, as will capitalization requirements.
The concept behind housing and construction banks is for citizens to receive mortgages by making bank deposits. The loan volume will significantly exceed the deposit amount.
The Azerbaijani Mortgage Fund provides mortgage lending through 21 authorized banks at the expense of the state budget, and through the placement of mortgage bonds by financing commercial mortgages.