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The Central Bank of Azerbaijan has amended the rules for calculating bank capital and its adequacy
The Central Bank of Azerbaijan has amended the rules for calculating bank capital and its adequacy
The Board of the Central Bank of Azerbaijan (CBA) has amended the “Rules for Calculating Bank Capital and Its Adequacy,” which were approved by its decision dated April 24, 2020.
New development from the Central Bank for entrepreneurs – A NEW FINANCIAL INSTRUMENT INTRODUCED
In connection with this, the Chairman of the CBA, Taleh Kazimov, has signed a new resolution.
According to the resolution, from now on, consumer credit lines will be converted into credit at a rate of 40% (credit conversion factor – 0.4). The unused portion of consumer credit lines (recorded in off-balance sheet accounts) will be classified as 100% risk-weighted assets after being converted into credit.
In addition, obligations that, under contract, grant the bank the unilateral right not to fully perform will be converted into credit at a rate of 0% (credit conversion factor – 0), and consumer credit lines will not be taken into account in such cases.
The CBA’s Legal Department has been instructed to submit this resolution to the Ministry of Justice within three days for inclusion in the State Register of Legal Acts.
The Board of the Central Bank of Azerbaijan (CBA) has amended the “Rules for Calculating Bank Capital and Its Adequacy,” which were approved by its decision dated April 24, 2020.
New development from the Central Bank for entrepreneurs – A NEW FINANCIAL INSTRUMENT INTRODUCED
In connection with this, the Chairman of the CBA, Taleh Kazimov, has signed a new resolution.
According to the resolution, from now on, consumer credit lines will be converted into credit at a rate of 40% (credit conversion factor – 0.4). The unused portion of consumer credit lines (recorded in off-balance sheet accounts) will be classified as 100% risk-weighted assets after being converted into credit.
In addition, obligations that, under contract, grant the bank the unilateral right not to fully perform will be converted into credit at a rate of 0% (credit conversion factor – 0), and consumer credit lines will not be taken into account in such cases.
The CBA’s Legal Department has been instructed to submit this resolution to the Ministry of Justice within three days for inclusion in the State Register of Legal Acts.