(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.
Mais Piriyev, spokesman for the Finance Ministry, has told Trend that the ministry has so far allocated 430.6 million manats ($253 million) to pay compensation on problem loans to individuals.
He stated that to implement Azerbaijani President Ilham Aliyev's decree, upon the appeal of the Financial Market Supervisory Authority of Azerbaijan (FIMSA), on May 8-14, the Finance Ministry transferred 53.5 million manats ($31 million) and 26.3 million manats ($15 million) in two tranches to the banks' correspondent accounts at the Central Bank.
"Taking into account the Finance Ministry's first tranche worth 350.8 million manats ($206 million) for paying compensation, the amount of funds transferred so far to the correspondent accounts of the postal operator and banks, including those which are being liquidated, reached 430.6 million manats ($253 million)," Piriyev said.
Earlier, 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 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.
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 ($126.5 million) 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 U.S. 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 which the loan was taken in.
Mirsaid Ibrahimzade is AzerNews' staff journalist, follow him on Twitter: @MirsaidIbrahim1
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