Purpose and essence of write-offs on loans up to 17,000 AZN unveiled

  • 13:56 01 March 2019

Purpose and essence of write-offs on loans up to 17,000 AZN unveiled

Assistant to the President for Economic Policy and Industrial Issues-Head of Department Natiq Emirov clarified applying the Decree  "On Additional Measures to Solve Terrible loans of individuals in the Republic of Azerbaijan" signed by Azerbaijani president Ilham Aliyev, to the loans in national currency up to 17,000 manat along with the loans in foreign currency in the amount of up to $ 10,000, ONA reports.

N. Amirov said that the Decree does not apply only to the foreign currency loans before devaluation.

The president's assistant said that the second part of the decree covers all types of loans taken in either manat or in foreign currency from 2012 until now, that have been delayed for a period of at least 360 days (1 year) to 28 February: “If a citizen has been borrowing in manat in 2015-2016 and has not been able to repay it for a high interest so far, the loan of 17,000 manat has today turned into a loan of 52,000AZN. According to this decree signed by the President, only 17,000 AZN is the main amount of 52,000 manat. By decree, 17,000 manat is repayable and replaced by a 1% preferential loan for 5-year grace period. All penalties and interests collected from 17,000 to 52,000 manat, is completely erased by the bank. Due to these issues, banks' claims to courts are also withdrawn. It simplifies citizen’s social burden in a significant level. As a result of both parts of the decree, banks will have a great deal of liquidity. Because the vast majority of compensation paid to citizens as a result of the first and second devaluation, will be aimed at closing existing loans. On the other hand, for the restructuring of overdue loans, most of the funds paid through the second part of the decree will accumulate in banks and will have a lot of credit resource to finance the real economy of banks.

Faig Mahmudov