Baku, Azerbaijan, May 24
By Azad Hasanli – Trend:
The Azerbaijan Banks Association (ABA) will have a specialized "window", which will help fight the bad loans, a banking source told Trend May 23.
The source noted that the issue was discussed today by bankers and representatives of ABA.
"The "specialized window" is an office to be established within the Baku Approach. The principle will be as follows: individuals and legal entities that have credit in several banks will be able to apply to this office for help. The office, in turn, will contact the banks and discuss how to help the clients. Among the possible options are the restructuring of the loan or the issuance of a new loan to repay bad loans," the source said.
The source believes such an approach based on the Turkish model (Istanbul Approach) is hardly possible to be applied fully in Azerbaijan. It can be applied to big legal entities that have loans in five to six banks. But this approach, the source noted, may not work in the case of individuals who have one bad loan.
"This narrows the scope of the Baku Approach and does not allow it to be applied to those who take consumer loans," the source added.
Over the past two or three years, banks have restructured a big number of loans, but each bank has taken these measures separately, and the desired results have not been achieved across the market. The Baku Approach, in turn, provides for comprehensive measures to deal with bad loans, including restructuring loans and easing credit conditions.
According to the Central Bank of Azerbaijan, the volume of overdue loans in the country as of April 1, 2018 amounted to 1.71 billion manats, which is 7.5 percent more than in the same period last year. The share of overdue loans in the banks' total loan portfolio increased from 10.2 to 14.6 percent over the period.
There are 30 banks in Azerbaijan.
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