Applying stricter requirements by the banking system for granting loans may lead to reduction in interest rates, Trend Agency quoted Deputy Chairman of the Central Bank of Azerbaijan (CBA) Aftandil Babayev as saying on January 28.
He noted the tendency of reduction of loan rates is observed in Azerbaijan. As of 2013, the rates have decreased by 2 percent, he added.
Babayev went on to say that the CBA also considers there is a need to change the procedure of car loans, and suggests the banks to tighten it.
These steps will have positive results not only for bank customers, but also for banks, he said.
Earlier, the CBA called domestic banks to apply stricter regulations over paying loans to their clients. The CBA has sent a letter with instructions to the banks operating in the country to stop lending to borrowers without a workplace reference. Individuals should give a statement of salary or a statement of their earnings from other officially confirmed sources.
This measure is aimed at preventing possible risks in the future. There is an approved procedure for issuing loans. This includes the necessity of submitting a certificate of employment. This paragraph has not been violated, but the CBA believes that control of its implementation was insufficient and banks were instructed to control compliance with the rules.
The Azerbaijani banks have increased lending to the economy by 24.51 percent in January-November 2013 and by 29.96 percent per annum.
The banks delivered loans totaling over 15.245 billion manats including about 10.927 billion manats in national currency and around 4.319 billion manats in freely convertible currency.
There are 43 banks in Azerbaijan.