Regulatory Alerts2022-11-16
Regulation on Prudential Regulation of Project Financing Loans
The Central Bank of the Republic of Azerbaijan issued Resolution 46/1 to establish a comprehensive prudential framework for project financing loans in domestic and foreign bank branches. The regulation defines high-quality projects, mandates rigorous credit risk assessments including monthly compliance checks and independent expert approval of business plans, and requires banks to maintain specific reserves and exit strategies. It further specifies risk weights for capital adequacy calculations based on equity participation and currency denomination, while obligating banks to notify the regulator within five days of loan issuance and submit monthly prudential reports.
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