12:01 - 29.05.2019

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May 29, Fineko/abc.az. The new Rules of classification of bank assets approved by the Financial Market Supervision Authority of Azerbaijan in November 2018 came into force on 29 May 2019.

In accordance with the Rules the assets of banks are divided into standard and non-standard. Standard assets include satisfactory and supervised assets, while non-standard assets consist of unsatisfactory, dangerous and non-performing assets.

Classification of assets is now carried out separately on term of delays and on terms of quality, whereas previously one classification was conducted together on both indicators. If asset categories differ as a result of two classifications, the lower category of classification is taken as the basis.

Also, the new rules envisage the division of assets into secured and unsecured.

Assets are classified on period of delays provided for unsecured assets if the market value of the acceptable security of the asset falls below 100% of the total amount of the asset, and 150% - if the security is unacceptable.

The delay period of the asset is calculated from the date approved as the principal or interest payment period.

Each asset classification category has its own indicators and criteria.

In addition, the rules determine the procedure for creating reserves and writing off assets, classification of consumer loans, restructured assets, interbank claims and off-balance sheet liabilities.