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Azerbaijani banks offer to exempt insolvent borrowers from taxes

11 December 2017 17:35 (UTC+04:00)
Azerbaijani banks offer to exempt insolvent borrowers from taxes

By Trend

Azerbaijani banks have offered to exempt insolvent borrowers from taxes, a source in the country’s banking sector told Trend.

Representatives of Azerbaijan’s Financial Market Supervisory Authority, the country’s Banks Association and heads of local banks discussed this issue at a meeting held on December 8.

The source noted that insolvent borrowers may be temporarily or fully exempt from taxes. At the same time, the source didn’t specify from which taxes the borrowers may be exempt.

Other proposals made at the meeting included creation of a mechanism for managing troubled assets and the development of the so-called Baku Approach. This approach may be created by analogy with the London Approach or the Istanbul Approach.

It was proposed to restructure troubled loans and reconsider the terms of lending, so that borrowers could repay their debts more easily. At the same time, the Baku Approach envisages banks’ joint restructure of loans of a borrower if a person has several overdue loans in different banks.

In January-October 2017, the volume of overdue loans in Azerbaijan amounted to 1.889 billion manats, which is 37.4 percent more than in the same period last year, according to the Central Bank of Azerbaijan. The share of overdue loans in the total loan portfolio of banks and non-bank credit organizations was 15.55 percent.

(1.7 manats = 1 USD on December 11)

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