Central Bank extends COVID-19 relief package for entrepreneurs

By Azernews

By Vugar Khalilov

The Central Bank of Azerbaijan (CBA) has extended the term of the support package to mitigate the negative impact of COVID-19 on the country’s finance sector, the Bank reported on July 1.

The support package covers entrepreneurs and business entities affected by COVID-19 and is provided in the context of a gradual economic recovery in the country amid easing COVID-related measures in various sectors of the economy.

The relevant decision was taken in line with the No1950 Presidential Decree and the Action Plan approved by the Cabinet of Ministers, the bank said in its report.

According to the decision by the CBA management board on June 30, which allows avoiding the accrual of interest, penalties and other fines, the validity of recommendations to credit institutions to prevent the deterioration of customers' credit history due to delinquencies on loan obligations has been extended until October 1.

Moreover, restrictions imposed on dividends will remain in force until this date in order to further strengthen the capital position of credit and insurance institutions, and ensure their funds are directed to the capital.

“At the next phase of gradual adaptation of the banking sector to the new regulatory requirements, as of July 1, market and operational risks will be considered in the aggregate and first-order capital adequacy ratios of banks.

Moreover, from this date, the minimum threshold for the aggregate capital adequacy ratio will be restored at the level established by the relevant regulations of the CBA. The application of these requirements will serve to create an additional buffer in the capital of banks to cover operational and market risks,” the bank said.

The Central Bank constantly refines the regulatory support regime and makes policy decisions according to the current state of the financial sector, of its analysis, as well as recommendations of international financial institutions, the report says.