Azerbaijan, Baku, 8 February / corr Trend I.Khalilova / The National Bank of Azerbaijan (NBA) submitted to the Azerbaijan Government a draft law on savings accounts for the housing market, Rufat Aslanly, the deputy chairman of the NBA Managing Board, said.
The difference of this system from that of a mortgage system which is currently in operation is that there are plans to establish special savings accounts. The public will be able to save their money for a certain period and after its expiry date, they are then permitted to take a loan from the bank for the purchase of a home. This property will act as a security for the loan.
Such a mortgage system was applied in Germany after World War II to resolve the dwelling problem. However, now the German and other European banks use this system for the issue of insured mortgage needs for financing the housing market.
A Commertz Bank delegation led by Martin Blessing, a member of the Managing Board, showed interest in participating in the mortgage market of Azerbaijan at a meeting held at the NBA on 7 February.
"Firstly, they should become familiar with the conditions and activities of the local market, Aslanly said. During the discussions Commertz Bank, which was informed about the bill, voiced its readiness to consider ways for further cooperating with its adoption, due to the fact that the German bank has daughter banks functioning on this system.
Mortgaging was set up in March 2005 through financing authoritative banks out of the funds of the Azerbaijani Mortgage Fund functioning at the NBA. Since the beginning of its activities the Fund was maintained though financing by the public budget, whereas in line with the new mechanism along with the budget financing foreign loan is attracted for crediting on commercial conditions.