Azerbaijan, Baku, August 22 /Trend A. Akhundov /
Azerbaijani Central Bank (CBA) plans to ease reserve requirements to the country's banks, CBA said on Thursday.
These changes are envisaged in the Central Bank's drafted project for new rules of asset classification and creation of reserves for the coverage of possible losses.
According to the rules, assets fall into two groups: standard and non-standard. Standard assets group includes satisfactory and controlled assets and the non-standard assets group includes unsatisfactory, dangerous and unreliable assets.
If according to the current rules, commercial banks should create reserves in the amount of 2 per cent of the loan cost, belonging to the category of satisfactory assets, and 10 per cent for controlled assets, the new rules envisage the reduce of requirements to 1 per cent and 5 per cent respectively.
Requirements on other categories will remain unchanged - 30 per cent for unsatisfactory assets, 60 per cent - for dangerous assets and 100 per cent - for unreliable assets.
Satisfactory assets include loans with which the principal and interest payments are repaid in accordance to loan agreements or with expiration of up to 30 days, controlled assets - with expiration of 31 to 60 days, unsatisfactory assets - from 61 to 120 days, dangerous assets - from 121 to 180 days, unreliable assets - over 180 days.