Bank Capital Rules changed to urge more loans for real sector - INNOVATION

16:13 - 31.10.2019


October 31, Fineko/abc.az. The fact of consumer lending preference by the domestic banks was particularly stressed at the governmental meeting chaired by the Azerbaijani president. Shortly after the meeting, the Financial Markets Supervision Authority (FIMSA) amended the Rules of Calculating Bank's Capital & its Adequacy.

ABC.AZ reports that the relevant statement was made by Vugar Bayramov, the chairman of the Center for Economic & Social Development.

He also told about the purpose of amending the Rules: "The goal of approval of the amended Rules is to achieve even greater allocation of loans to the real sector. Thus, the risk rates of loans given to small and medium-sized businesses and to finance exports to the nonoil sector have already been reduced. Reduction of risk rates makes it more interesting investing the gathered resources into those spheres, allowing banks to give more business loans within their current capital. The changes in the Rules also reflect the matters relating to more efficient organization and elimination of speculative circumstances of prudential policy in connection with responsible lending and sound borrowing. That is, when determining the risk rates on consumer loans, the Rules apply a differentiated and more stringent approach depending on the ratio of income, interest rate, term and currency of the debt."

 

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