(MENAFN - AzerNews)
By Mirsaid Ibrahimzade
Azerbaijan is actively working to solve the issues of concern associated with problem loans that have been discussed for a long time.
Previously, Azerbaijani President Ilham Aliyev signed a decree on additional measures in connection with solving the issue of the individuals' problem loans. The decree envisages the payment of compensation to citizens whose loan burden increased as a result of the devaluation of the manat in February and December 2015.
The payment of compensations for problem loans in Azerbaijan began on April 22. It is expected that 602,347 people will receive compensation.
Next week, Azerbaijan will begin restructuring loans under the President Ilham Aliyev`s decree, Zakir Nuriyev, Chairman of the Azerbaijan Banks Association (ABA), toldthe AzTV state TV channel.He noted that a single credit form for restructuring loans was already approved.
Speaking about the decree, Nuriyev stressed that it is one of the most revolutionary documents in the financial sphere of the country signed by the head of state. The decree reaches over 600,000 people. According to Nuriyev, addressing the issue of problem loans will help improve the welfare of borrowers.
"The decree will not only improve the social well-being of the citizens, but will also help improve the financial situation of banks," the Association chairman added.
Commenting on the first day of payment, Nuriyev noted that neither banks, nor citizens had encountered any problems.
'The first day can be considered a success. This gives us the confidence that we will be able to provide compensation payments to all citizens in the future, he said.
Given the large number of people, the Finance Ministry, with the approval of the Financial Market Supervisory Authority of Azerbaijan (FIMSA), will gradually transfer funds to the accounts of credit institutions.
The presidential decree aimed at improving the welfare of the population is an important element of the social policy. That's because the solution of the problem of credit loans of the population won't only ease the financial burden, but will also restore confidence in the banking sector and free some debtors from legal proceedings.
The decree applies both to loans taken from banks and non-bank credit organizations. Credit unions are an exception.
According to the decree, opportunities are created for restructuring both US dollar loans and manat loans with a delay of more than 360 days on concessional terms. If the amount of compensation exceeds 500 manats, these funds will be transferred to the account of the individual; otherwise, the payment will be made via money transfer.
In addition, banks will receive preferential loans under a state guarantee in the amount of up to 682 million manats as part of the decree. In order to prevent deterioration of the currency position of banks, they will also be provided with securities worth up to 215 million manats with an annual interest rate of 0.5 percent for the allocated loan.
The decree also covers loans in rubles and euros. Loans in euros and rubles will be converted into US dollars at the rate of the Central Bank for February 21 and December 21, 2015. Compensation will be issued in manats, regardless of the currency the loan was taken in.
The corresponding plastic cards to be received by individuals are issued for a period of one year free of charge. Banks and the Azerpost postal operator are not entitled to charge fees for issuing or conducting operations with these cards or for making money transfers.
Recently, an appeal commission for considering appeals related to this decree has been formed. According to FIMSA, numerous appeals continue to be received in connection with the issue of problem loans. In accordance with the law, all appeals are reviewed within 15 business days or within 30 business days if additional evaluation is necessary. If there is a need for additional information or for sending a request to other structures, appeal review period may also take 30 days.
Earlier, the website for compensation of problem loans was presented in Azerbaijan, through which citizens can get detailed information about their credit debt, the amount of compensation, including what part will be received by the borrower and what will be used to pay off the debt, and the ways of loan restructuring, among other things.
Mirsaid Ibrahimzade is AzerNews' staff journalist, follow him on Twitter: @MirsaidIbrahim1
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