Azernews.Az

By Trend

Bringing Azerbaijani banks and regulations in this sector in line with the international financial reporting standards will make it possible to ensure an increase in foreign investments in the country’s banks, Zakir Kazimov, chairman of the committee on internal audit, accounting, taxes and reporting of the Azerbaijan Banks Association (ABA), said in an interview with ABA newspaper, Trend reports.

He said that thanks to this, foreign investors will trust the banking system of Azerbaijan and work freely.

In November 2018, the Azerbaijani Financial Market Supervisory Authority (FIMSA) made changes to a number of regulatory acts, including the rules for regulating credit risks regarding related borrowers, the rules for determining limits on open currency positions in banks, rules for calculating capital and its adequacy, and others, he added.

Kazimov noted that the new rules were adopted by the FIMSA after discussions with representatives of the banking sector and take into account their proposals. The regulator is in talks with market participants to amend the prudential regulations, he said.

He also commented on the “Rules for calculating capital in banks and its adequacy.”

Kazimov reminded that the adopted new rules provide for the allocation of systemically important banks in a separate category.

“According to the current rules, the tier 1 capital adequacy ratio should be 5 percent, and for aggregate capital this figure should be 10 percent,” he said. “The new rules of the FIMSA provide for more stringent requirements for systemically important banks. Thus, capital adequacy ratio requirements for such banks will increase every six months.”