Azerbaijan gives banks one year to meet Basel III capital rules

Azerbaijan’s central bank has given local lenders one year to align their capital with Basel III standards, Azernews reports, citing the Central Bank of Azerbaijan (CBA).

The transition period follows amendments approved by the CBA’s board on December 16, revising the rules on the calculation of bank capital and capital adequacy. The changes are part of the country’s 2024–2026 Financial Sector Development Strategy, aimed at strengthening financial stability and aligning regulation with international standards.

Under the revised framework, the structure of bank capital, capital adequacy ratios, capital buffers and other prudential requirements have been brought in line with Basel III norms.

The introduction of new capital buffers is expected to enhance banks’ resilience to potential losses, improve risk assessment, and raise the quality of bank capital, while supporting the sustainable financing of the economy.

The central bank said full implementation of the Basel III-aligned capital requirements will also strengthen prudential supervision and improve the banking sector’s attractiveness for international investors.

Banks are required to fully comply with the new rules from January 1, 2027, following the one-year transition period.