Local banks suspend operations with credit cards

/By Azernews/

By Fatma Babayeva

Banks operating in Azerbaijan have suspended operations with credit cards due to the introduction of the moratorium on the issuance of consumer loans in foreign currencies, the Association of Banks told Trend on April 27.

As the operations carried out with the credit cards in foreign currencies fall under the category of consumer loans, the banks temporarily ceased their use, the association said.

In accordance with the decision made by the Financial Market Supervisory Body of Azerbaijan, banks suspended issuing consumer loans in foreign currency since April 5 for a month.

The Supervisory Body reserves the right to prolong this period.

In order to ensure financial stability and protection of consumer rights, it was decided to conduct in-depth and comprehensive analysis on issuing loans in foreign currencies to determine the new regulatory framework within one month.

The data provided by the Central Bank of Azerbaijan shows that 842,000 transactional operations were carried out with credit cards in February 2016, which totaled 128 million manats ($85.2 million).

Namely, 189,000 operations out of the total transactions with credit cards within the country were carried out via ATMs which amounted to 50 million manat ($33.2 million), 254,000 transactions via POS-terminals which amounted to 33 million manats ($22 million).

The total number of the credit cards amounted to 792,000 for the given period which is 40 percent less than the same period last year.

Currently, the Financial Market Supervisory Body is planning to develop a model defining new vision on loan allocation and legal framework by May which will be discussed with the banking sector and public later.

There are no restrictions for lending in national currency in Azerbaijan. Banks can issue both business and consumer loans. However, Supervisory Body made a decision on suspending the issuance of loans to the pensioners as well explaining it with the fact that this category of population fall under the group of high-risk borrowers.