Regulatory Alerts2026-02-04
Regulations on Calculation of Bank Capital and Its Adequacy
The Central Bank of the Republic of Azerbaijan issues these regulations to establish comprehensive rules for calculating total regulatory capital, risk-weighted assets, and capital adequacy ratios for all domestic banks and foreign bank branches. The framework mandates a minimum paid-in capital of AZN 50 million, defines strict eligibility criteria for Common Equity Tier 1, Additional Tier 1, and Tier 2 instruments, and requires banks to maintain specific capital buffers aligned with economic cycles and systemic importance. Banks must continuously assess their risk profiles through stress testing, internal audits, and supervisory oversight to ensure sufficient loss-absorbing capacity and long-term financial sustainability.
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