Resumption of bad loans announced - Attention

11:35 - 25.09.2019


September 25, Fineko/abc.az. Most banks hid the real volume of bad loans, ABC.AZ reports citing expert on the banking sector Akram Hasanov.

According to him, now, after the crisis, banks are gradually forced to disclose the real volume of problem loans.

The expert says that more than once international rating agencies have said that the volume of problem loans significantly exceeds the figures announced by banks: “Some loans issued in recent years were also problematic, and this trend is expected to continue. This was announced. Why am I talking with such confidence? Before the crisis, a large number of problem loans was formed because banks competed with each other about who will give out more loans, as some loan managers of banks received remuneration, depending on the amount of the loan issued. Loans were issued to everyone in a row, especially to the population. After the crisis in 2016, the Central Bank made changes to the rules, limiting the amount of these bonuses. In a document called “Management of Corporate Standards,” the Central Bank indicated how much remuneration could be paid. However, the Financial Markets Supervision Chamber (the Chamber) once or twice a month ago adopted these rules again and softened the requirements. So, again, bank managers will compete with each other about who will give out more loans and earn more bonuses. Unfortunately, the Chamber is currently creating the conditions for this, ”said the expert.

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