Azerbaijan to write off problem dollar loans of citizens


February 28, Fineko/abc.az. Azerbaijani President Ilham Aliyev has signed a decree on the solution of a question of problem loans of individuals.

Under the decree, part of the amount of loan debt of individuals under $10,000 (AZN 17,000), which increased after the devaluations in manat terms, will be repaid at the expense of the State Budget, no later than within three months from the decree signing date at the exchange rate of the Central Bank.

The principal amount of loans, taken before 21 February 2015, will be compensated in the amount of AZN 0.25 ($0.15) for each US dollar and of loans given from 22 February to 21 December 2015 – AZN 0.6 ($0.35) for each US dollar.

Under the decree, the Central Bank will allocate AZN 682 million to banks on the basis of the appeal of the Financial Market Supervision Chamber (FIMSA) for restructuring of problem foreign currency loans of citizens.

The Central Bank should prevent the deterioration of foreign exchange positions of banks and provide banks on the basis of their appeals with securities in the amount of up to $215 million with an annual interest rate of 0.5%.

Banks are tasked to conclude with customers new discount loan contracts and write off loan interests during one month and withdraw the materials transferred to the courts. FIMSA is to submit to the Central Bank and the Ministry of Finance a list of loan debtors and the amount of problem loans for each bank.

The amount of compensation to each individual should not exceed the amount equivalent to $5,000.