Azerbaijan, Baku, Feb.17 / Trend N. Ismayilova /
The Central Bank of Azerbaijan (CBA) defines a mechanism for applying the law "On Bank for Housing and Construction", CBA Deputy Chairman Vadim Khubanov said on Thursday.
"This issue is currently being discussed and the mechanism of its application has not yet been defined, but it may be used as a tool for development of the mortgage market," Khubanov said.
He said that the use of such tools in the country meets the modern realities and the public is interested in acquiring property through the savings mechanism.
"Today there are various options in the world and the share of savings to receive a mortgage loan can be both 50 percent and 30 percent," he said.
The CBA previously prepared a draft law on housing and construction banks, and submitted it to the Presidential Administration. 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.
Today, the world is seeing reduced tensions after the crisis. The CBA is now working to make this alternative form of lending more active, head of the CBA Legal Department Rana Malikova said earlier. The CBA has been provided with expert help through the German KfW Development Bank.
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 envisages 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 22 authorized banks at the expense of the state budget and through the placement of mortgage bonds by financing commercial mortgages.