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President Ilham Aliyev: "There should be no surprises in the banking sector"

17 January 2020 02:36 (UTC +04:00)

"There should be no surprises in the banking sector. There should be very rigorous control over their activities and the provision of loans this year," President of the Republic of Azerbaijan Ilham Aliyev said during his speech at the meeting on the results of 2019, APA reports.

The Head of State said banks have been allocated resources in the amount of 2 billion manats and consumer loans again constitute an advantage. "This can become a very dangerous trend. Therefore, we must take measures for the banking sector to be more supportive of the real sector. Therefore, you should look at the mechanism for issuing business loans, so that banks are interested in this. And the Central Bank should exercise control over this. After all, we can’t leave this out of sight. Of course, consumer loans are simpler and more favorable for some banks. But for the country's economy, business loans are more preferable. Therefore, discuss these issues with the Ministry of Economy. Today, approximately 170 million worth of low-interest loans are envisaged through the Ministry of Economy and the Fund on Support for Entrepreneurship."

President Ilham Aliyev emphasized that as the discount rate decreases, interest rates provided by private banks will approach the level of low-interest loans. "Therefore, there must be coordination in this issue. The banking sector is a very large instrument, i.e. it should support the real sector of the economy."

Mr President said there should be no surprises in the banking sector. "There should be very rigorous control over their activities and the provision of loans this year. In particular, there should be a mechanism in respect of doubtful loans so that we can prevent this not after the incident occurs, but before it. The responsibility of the banking sector has also increased because we continued to insure all deposits. And this is one of the unique events on a global scale. A few years ago, we applied this in order to build trust. At present, I believe that confidence in the banking sector is at a high level."

President Ilham Aliyev noted that the manat rate has been stable for more than three years, the economy is strengthening and the balance of payments is $6 billion. "So there is no danger. Therefore, state insurance of savings is a major step which enhances the responsibility of the banking sector. Control should be carried out in order to avoid surprises, and I believe that the new powers granted to the Central Bank can help in resolving this issue."