Azernews.Az

By Aynur Jafarova

The Central Bank of Azerbaijan (CBA) has called domestic banks to apply stricter regulations over paying loans to their clients, a source in the Azerbaijani banking sector told Trend news agency on January 16.

The CBA has sent a letter with instructions to the banks operating in the country to stop lending to borrowers without a workplace reference.

"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 source said.

The source noted the CBA's requirement is not associated with deterioration in the quality of bank loan portfolios, or growth of nonperforming loans (NPL).

"The quality of the largest banks' portfolios in the country is high. Simultaneously the debt burden is growing and it induces the CBA to respond with preventive measures. Though it can be said that in Azerbaijan this figure is much lower than in neighboring countries, including Russia," he stressed.

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 manat including about 10.927 billion manat in national currency and around 4.319 billion manat in freely convertible currency.

There are 43 banks in Azerbaijan.