Regulations on the Ratio, Calculation and Maintenance of Required Reserves

‘Approved’ Central Bank of the Republic of Azerbaijan Resolution № 16/1 10 July 2012 Governor

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Elman Rustamov Regulations on the ratio, calculation and maintaining required reserves

1. General provisions 1.1. These Regulations have been developed in accordance with Articles 29 and 32 of the Law of the Republic of Azerbaijan on the Central Bank of the Republic of Azerbaijan and determine a procedure for the ratio, calculation and maintaining required reserves for the banks and local branches of foreign banks operating in the Republic of Azerbaijan (hereinafter – banks). 1.2. The definitions used herein bear the following meanings: 1.2.1. required reserves – a monetary policy tool used by the Central Bank of the Republic of Azerbaijan (hereinafter – the Central Bank) in regulation of money supply and banking system liquidity. 1.2.2. reserve requirement ratio – an interest indicator used in calculation of bank’s required reserves that represents a certain part of the calculation base. 1.2.3. calculation base – bank’s liabilities in national and foreign currencies, precious metals considered in calculation of required reserves. 1.2.4. calculation period – the period that covers the days required reserves are calculated for and the calculation base relates to. 1.2.5. maintenance period – the period covering the days of maintaining required reserves calculated on the basis of the calculation base of the last accounting period. 1.2.6. linked deposits – bank deposits related to one of the following groups: 1.2.6.1. several deposits owned by one individual. 1.2.6.2. several deposits owned by one legal entity. 1.2.6.3. deposits of a legal entity and legal persons or individuals holding a controlling interest in it. 1.2.6.4. deposits of two or more legal entities owned by the same person who is not the bank’s depositor. 1.2.6.5. deposits of any depositor who has a loan in the bank, as well as deposits of individuals jointly or subsidiarily liable for that loan (e.g., guarantors). 1.2.6.6. deposits of two or more persons who pledge the same collateral for their loans in the bank. 1.2.6.7. deposits of all legal entities owned by the state holding a controlling interest. 1.2.7. For the purposes of these Regulations, ‘controlling interest’ is defined as a participation share of 51% or more in the charter capital of a legal entity, and ‘a related party’ is defined as individuals specified in the Law of the Republic of Azerbaijan ‘on Banks.’ 1.3. The reserve requirement ratio is set either the same across all deposits, or differently depending on the deposits’ type, maturity, currency or the size of the calculation base.

2. Reserve requirement ratio and its calculation 2.1. The reserve requirement ratio is determined as a percentage of liabilities. 2.2. Depending the share of linked deposits in total deposits (both in national and foreign currency for legal entities and individuals), the share of related party deposits in total deposits (both in national and foreign currency for legal entities and individuals), and whether total amount of national currency denominated deposits of legal entities exceeds AZN1B and total amount foreign currency denominated deposits of legal entities exceeds AZN750M equivalent, the reserve requirement ratio is determined by the Management Board of the Central Bank differentiated as follows: 2.2.1. attracted in the national currency: 2.2.1.1. on deposits of individuals and unincorporated individuals (hereinafter – private entrepreneurs). 2.2.1.2. on deposits of legal entities. 2.2.2. attracted in foreign currency: 2.2.2.1. on deposits of individuals and private entrepreneurs. 2.2.2.2. on deposits of legal entities. 2.2.3. on deposits attracted in precious metals. 2.2.4. due to the non-resident financial sector and settlements with international financial institutions: 2.2.4.1. on liabilities and settlements in manat. 2.2.4.2. liabilities and settlements in foreign currency. 2.2.4.3.on liabilities in precious metals. 2.3. A decision on reserve requirement and cancellation of the reserve requirement takes effect from the date defined by the Management Board of the Central Bank and banks are informed officially to that end. 2.4. A decision on cancellation or reduction of the reserve requirement ratio takes effect on the date set by the Management Board of the Central Bank and banks are officially informed about it. 2.5. Required reserves are calculated on the basis of the average daily balance of the bank's calculation base for the calculation period (Annex 1). The share of linked deposits in total deposits (both in national and foreign currency for legal entities and individuals) and the share of related party deposits in total deposits (both in national and foreign currency for legal entities and individuals) is calculated based on average daily balance of the calculation period and included to the required reserve report. 2.5-1. When related deposits belong to several groups, the share of the group with the highest total amount should be taken and included in the report. 2.5-2. When calculating the share of related party deposits in total deposits (both in national and foreign currency for legal entities and individuals), all related parties should be considered collectively. 2.5-3. When deposits simultaneously belong to a related party and linked deposits, they should be considered in both the calculation of the share of linked deposits in total deposits and the calculation of the share of related party deposits in total deposits. 2.5-4. When calculating the share of linked deposits in total deposits (both in national and foreign currency for legal entities and individuals) and the share of related party deposits in total deposits (both in national and foreign currency for legal entities and individuals) the following deposits are not considered in linked and related party deposits: 2.5-4.1. deposits of financial institutions, including accounts of banks’ subsidiary financial institutions. 2.5-4.2. loro accounts. 2.5-4.3. deposits attracted as subordinated debt liabilities. 2.6. Required reserves on foreign currency and precious metals are calculated at an official exchange rate of manat set by the Central Bank as of the last work day of the calculation period.

2.7. The calculation period begins on the first and ends on the last calendar day of each month. 2.8. When a bank is reorganized in line with the reorganization form required reserves for the reorganized bank(s) are re-calculated on the basis of the bank’s (s’) calculation. 2.9. The Bank should submit a report on required reserves (Annex 2) to the Central Bank within 5 (five) work days after the calculation period. 2.10. Required reserves for the next maintenance period are determined with the said report. 2.11. Deposits in the balance of the bank outside the Republic of Azerbaijan are not included to the calculation base. 3. Maintaining required reserves 3.1. Required reserves are maintained in the bank’s correspondent account with the Central Bank. 3.2. The maintenance period begins on the 15th calendar day of the month following the end of the calculation period and lasts until the 14th calendar day of the following month. 3.3. Average daily balance of the correspondent account for the maintenance period should not be less than required reserves calculated on the basis of the calculation base covering the last calculation period. 3.4. The balance of correspondent accounts for non-work days over the maintenance period is taken into account in the amount of the balance of the previous work day. 3.5. The Bank should maintain required reserves on deposits in the national currency and precious metals included to the calculation base in correspondent accounts in the manat with the Central Bank, and on deposits in foreign currency in correspondent accounts with the Central Bank in the USD. 3.6. If the rule of calculation or maintenance of required reserves is violated during the maintenance period, a financial sanction is imposed on the bank for unmet amount of required reserves in accordance with Article 32 of the Law of the Republic of Azerbaijan ‘on the Central Bank of the Republic of Azerbaijan’ and the financial sanction amount is deducted from the bank’s correspondent account(s) with the Central Bank. 3.7. If average daily balance of the bank's correspondent account for the maintenance period is less than AZN2000 (two thousand) or equivalent than required reserves calculated for that maintenance period, average daily balance of the bank's correspondent account for the next maintenance period should be kept in excess as much as that amount. This situation is not allowed to be repeated in one calendar year. 3.8. Every bank should appoint an officer responsible for maintaining required reserves and deliver written information on that person (1st, last and middle names, position with the bank and contact requisites) to the Central Bank. In case the officer responsible for maintaining required reserves changes, the bank should deliver the above information on the new officer to the Central bank within 3 (three) work days. 3.9. To maintain macroeconomic stability, resilience and sustainability of financial markets, when the Management Board of the Central Bank takes a decision on payment of interest on required reserves, all credit institutions are notified accordingly. The interest is paid within the period specified in the decision of the Management Board and applies to all credit institutions that maintain reserve requirements.

Annex № 1 to the Regulations on the ratio, calculation and maintaining required reserves Liabilities Balance accounts 1 Due to the non-resident financial sector 35215, 35218, 35265, 35268, 35295, 35298, 35325, 35328, 35375, 35378, 35405, 35408, 35435, 35438, 35485, 35488, 35515, 35518, 35545, 35548, 35595, 35598, 35625, 35628, 35715, 35718, 35755, 35758, 35775, 35778, 35931, 35933, 35939 in manat in foreign currency 35225, 35228, 35240, 35243, 35275, 35278, 35305, 35308, 35335, 35338, 35350, 35353, 35385, 35388, 35415, 35418, 35445, 35448, 35460, 35463, 35495, 35498, 35525, 35528, 35555, 35558, 35570, 35573, 35605, 35608, 35635, 35638, 35725, 35728, 35740, 35743, 35765, 35768, 35785, 35788, 35941, 35943, 35949 in precious metals 35235, 35238, 35250, 35253, 35285, 35288, 35315, 35318, 35345, 35348, 35360, 35363, 35395, 35398, 35425, 35428, 35455, 35458, 35470, 35473, 35505, 35508, 35535, 35538, 35565, 35568, 35580, 35583, 35615, 35618, 35645, 35648, 35951, 35953, 35959 2 Due to budget organizations and state funds 36010, 36015, 36040, 36045, 36110, 36113, 36115, 36140, 36143, 36145, 36148, 36310, 36313, 36315, 36318, 36340, 36343, 36345, 36348, 36930, 36931, 36932, 36933 in manat in foreign currency 36020, 36025, 36050, 36055, 36120, 36123, 36125, 36150, 36153, 36155, 36158, 36320, 36323, 36325, 36328, 36350, 36353, 36355, 36358, 36940, 36941, 36942, 36943 in precious metals 36030, 36035, 36060, 36065, 36130, 36133, 36135, 36138, 36160, 36163, 36165, 36168, 36330, 36333, 36335, 36338, 36360, 36363, 36365, 36368, 36950, 36951, 36952, 36953 3 Settlements with international financial institutions 37042 in manat in foreign currency 37053, 37054 in precious metals 37063, 37064 4 Due to state owned legal entities 38010, 38020, 38030, 38040, 38050, 38060, 38070, 38080, 38090, 38310, 38320, 38330, 38340, 38350, 38360, 38363, 38370, 38373, 38380, 38383, 38390,

38393, 38610,38613, 38620, 38623, 38630, 38633, 38640, 38643, 38650, 38653, 38660, 38663, 38670, 38673, 38680, 38683, 38690, 38693, 38931, 38932, 38933, 38934, 38935, 38936, 38937, 38938, 38939 in manat in foreign currency 38110, 38120, 38130, 38140, 38150, 38160, 38170, 38180, 38190, 38410, 38413, 38420, 38423, 38430, 38433, 38440, 38443, 38450, 38453, 38460, 38463, 38470, 38473, 38480, 38483, 38490, 38493, 38710, 38713, 38720, 38723, 38730, 38733, 38740, 38743, 38750, 38753, 38760, 38763, 38770, 38773, 38780, 38783, 38790, 38793, 38941, 38942, 38943, 38944, 38945, 38946, 38947, 38948, 38949 in precious metals 38210, 38220, 38230, 38240, 38250, 38260, 38270, 38280, 38290, 38510, 35813, 38520, 35823, 38530, 35833, 38540, 35843, 38550, 35853, 38560, 35863, 38570, 35873, 38580, 35883, 38590, 35893, 38810, 38813, 38820, 38823, 38830, 38833, 38840, 38843, 38850, 38853, 38860, 38863, 38870, 38873, 38880, 38883, 38890, 38893, 38951, 38952, 38953, 38954, 38955, 38956, 38957, 38958, 38959 5 Due to official offices of foreign states 39010, 39040, 39070, 39100, 39103, 39130, 39133, 39160, 39163, 39190, 39220, 39250, 39930, 39931, 39939 in manat in foreign currency 39020, 39050, 39080, 39110, 39113, 39140, 39143, 39170, 39200, 39230, 39260, 39940, 39941, 39949 in precious metals 39030, 39060, 39090, 39120, 39123, 39150, 39153, 39180, 39210, 39240, 39270, 39950, 39951, 39959 6 Due to non-state owned legal entities 40010, 40015, 40020, 40025, 40030, 40035, 40040, 40045, 40050, 40055, 40060, 40065, 40070, 40075, 40080, 40085, 40090, 40095, 40310, 40315, 40318, 40320, 40323, 40325, 40328, 40330, 40333, 40335, 40338, 40340, 40343, 40345, 40448, 40350, 40353, 40355, 40358, 40360, 40363, 40365, 40368, 40370, 40373, 40375, 40378, 40380, 40383, 40385, 40388, 40390, 40393, 40395, 40398, 40610, 40613, 40615, 40618, 40620, 40623, 40625, 40628, 40630, 40633, 40635, 40638, 40640, 40643, 40645, 40648, 40650, 40653, 40655, 40658, 40660, 40663, 40665, 40668, 40670, 40673, 40675, 40678, 40680, 40683, 40685, 40688, 40690, 40693, 40695, 40698, 40930, 40931, 40932, 40933, 40934, 40935, 40936, 40937, 40939 in manat

in foreign currency 40110, 40115, 40120, 40125, 40130, 40135, 40140, 40145, 40150, 40155, 40160, 40165, 40170, 40175, 40180, 40185, 40190, 40195, 40410, 40415, 40420, 40423, 40425, 40428, 40430, 40433, 40435, 40438, 40440, 40443, 40445, 40448, 40450, 40453, 40455, 40458, 40460, 40463, 40465, 40468, 40470, 40473, 40475, 40478, 40480, 40483, 40485, 40488, 40490, 40493, 40495, 40498, 40710, 40713, 40715, 40718, 40720, 40723, 40725, 40728, 40730, 40733, 40735, 40738, 40740, 40743, 40745, 40748, 40750, 40753, 40755, 40758, 40760, 40763, 40765, 40768, 40770, 40773, 40775, 40778, 40780, 40783, 40785, 40788, 40790, 40793, 40795, 40798, 40940, 40941, 40942, 40943, 40944, 40945, 40946, 40947, 40949 in precious metals 40210, 40215, 40220, 40225, 40230, 40235, 40240, 40245, 40250, 40255, 40260, 40265, 40270, 40275, 40280, 40285, 40290, 40295, 40510, 40513, 40515, 40518, 40520, 40523, 40525, 40528, 40530, 40533, 40535, 40538, 40540, 40543, 40545, 40588, 40550, 40553, 40555, 40558, 40560, 40563, 40565, 40568, 40570, 40573, 40575, 40578, 40580, 40583, 40585, 40588, 40590, 40593, 40595, 40598, 40810, 40813, 40815, 40818, 40820, 40823, 40825, 40828, 40830, 40833, 40835, 40838, 40840, 40843, 40845, 40848, 40850, 40853, 40855, 40858, 40860, 40863, 40865, 40868, 40870, 40873, 40875, 40878, 40880, 40883, 40885, 40888, 40890, 40893, 40895, 40898, 40950, 40951, 40952, 40953, 40954, 40955, 40956, 40957, 40959 7 Due to individuals and private entrepreneurs 41010, 41015, 41040, 41045, 41110, 41113, 41115, 41118, 41210, 41213, 41215, 41218, 41930, 41931, 41932, 41933 in manat in foreign currency 41020, 41025, 41050, 41055, 41120, 41123, 41125, 41128, 41220, 41223, 41225, 41228, 41940, 41941, 41942, 41943 in precious metals 41030, 41035, 41060, 41065, 41130, 41133, 41135, 41138, 41230, 41233, 41235, 41238, 41950, 41951, 41952, 41953 8 Debt securities issued 42010, 42013, 42030, 42033, 42050, 42053, 42070, 42073, 42110, 42113 in manat in foreign currency 42020, 42023, 42040, 42043, 42060, 42063, 42080, 42083, 42120, 42123 9 Other liabilities 45011, 45012, 45079, 45270 in manat in foreign currency 45021, 45022, 45089, 45280 in precious metals 45290

Annex № 2 to the Regulations on the ratio, calculation and maintaining required reserves Bank name: Reporting date: Table 1 (manat) Liabilities Balance accounts Balance on balance accounts Total Day 1 Day 2 ... Last calendar day of the month

1. Due to budget organizations and state funds 36010 36015 36040 36045 36110 36113 36115 36140 36143 36145 36148 36310 36313 36315 36318 36340 36343 36345 36348 36930 36931 36932 36933

in manat, Total 36020 36025 36050 36055 36120 36123 36125 2. Due to 36150 budget organizations 36153 and state funds 36155 36158 36320 36323 36325 36328 36350 36353 36355 36358 36940 36941 36942 36943 in foreign currency, Total 36030 3. Due to 36035 budget organizations 36060 and state 36065 funds 36130 36133

36135 36138 36160 36163 36165 36168 36330 36333 36335 36338 36360 36363 36365 36368 36950 36951 36952 36953 in precious metals, Total 4. Due to state-owned legal entities 38010 38020 38030 38040 38050 38060 38070 38080 38090 38310 38320 38330 38340 38350 38360 38363 38370 38373 38380

38383 38390 38393 38610 38613 38620 38623 38630 38633 38640 38643 38650 38653 38660 38663 38670 38673 38680 38683 38690 38693 38931 38932 38933 38934 38935 38936 38937 38938 38939 in manat, Total 38110 38120 38130 38140 38150 38160 38170

5. Due to state￾owned legal entities 38180 38190 38410 38413 38420 38423 38430 38433 38440 38443 38450 38453 38460 38463 38470 38473 38480 38483 38490 38493 38710 38713 38720 38723 38730 38733 38740 38743 38750 38753 38760 38763 38770 38773 38780 38783 38790 38793

38941 38942 38943 38944 38945 38946 38947 38948 38949 in foreign currency, Total 6. Due to state￾owned legal entities 38210 38220 38230 38240 38250 38260 38270 38280 38290 38510 38513 38520 38523 38530 38533 38540 38543 38550 38553 38560 38563 38570 38573 38580 38583 38590 38593 38810

38813 38820 38823 38830 38833 38840 38843 38850 38853 38860 38863 38870 38873 38880 38883 38890 38893 38951 38952 38953 38954 38955 38956 38957 38958 38959 in precious metals, Total 7. Due to official offices of foreign states 39010 39040 39070 39100 39103 39130 39133 39160 39163 39190 39220

39250 39930 39931 39939 in manat, Total 8. Due to 39020 39050 39080 official offices of foreign states 39110 39113 39140 39143 39170 39200 39230 39260 39940 39941 39949 in foreign currency, Total 9. Due to official offices of foreign states 39030 39060 39090 39120 39123 39150 39153 39180 39210 39240 39270 39950 39951 39959 in precious metals, Total 40010 40015 40020

10. Due to non-state￾owned legal entities 40025 40030 40035 40040 40045 40050 40055 40060 40065 40070 40075 40080 40085 40090 40095 40310 40315 40318 40320 40323 40325 40328 40330 40333 40335 40338 40340 40343 40345 40348 40350 40353 40355 40358 40360 40363 40365 40368

40370 40373 40375 40378 40380 40383 40385 40388 40390 40393 40395 40398 40610 40613 40615 40618 40620 40623 40625 40628 40630 40633 40635 40638 40640 40643 40645 40648 40650 40653 40655 40658 40660 40663 40665 40668 40670 40673

40675 40678 40680 40683 40685 40688 40690 40693 40695 40698 40930 40931 40932 40933 40934 40935 40936 40937 40939 in manat, Total 11. Due to non￾state-owned legal entities 40110 40115 40120 40125 40130 40135 40140 40145 40150 40155 40160 40165 40170 40175 40180 40185 40190 40195

40410 40415 40420 40423 40425 40428 40430 40433 40435 40438 40440 40443 40445 40448 40450 40453 40455 40458 40460 40463 40465 40468 40470 40473 40475 40478 40480 40483 40485 40488 40490 40493 40495 40498 40710 40713 40715 40718

40720 40723 40725 40728 40730 40733 40735 40738 40740 40743 40745 40748 40750 40753 40755 40758 40760 40763 40765 40768 40770 40773 40775 40778 40780 40783 40785 40788 40790 40793 40795 40798 40940 40941 40942 40943 40944 40945

40946 40947 40949 in foreign currency, Total 40210 40215 40220 12. Due to non￾state-owned legal entities 40225 40230 40235 40240 40245 40250 40255 40260 40265 40270 40275 40280 40285 40290 40295 40510 40513 40515 40518 40520 40523 40525 40528 40530 40533 40535 40538 40540 40543 40545 40548

40550 40553 40555 40558 40560 40563 40565 40568 40570 40573 40575 40578 40580 40583 40585 40588 40590 40593 40595 40598 40810 40813 40815 40818 40820 40823 40825 40828 40830 40833 40835 40838 40840 40843 40845 40848 40850 40853

40855 40858 40860 40863 40865 40868 40870 40873 40875 40878 40880 40883 40885 40888 40890 40893 40895 40898 40950 40951 40952 40953 40954 40955 40956 40957 40959 in precious metals, Total 13. Due to individuals and private entreprene 41010 41015 41040 41045 41110 41113 41115 41118 41210 41213

urs 41215 41218 41930 41931 41932 41933 in manat, Total 14. Due to individuals and private entrepreneur s 41020 41025 41050 41055 41120 41123 41125 41128 41220 41223 41225 41228 41940 41941 41942 41943 in foreign currency, Total 15. Due to individuals and private entrepreneur s 41030 41035 41060 41065 41130 41133 41135 41138 41230 41233 41235 41238 41950 41951

41952 41953 in precious metals, Total 16. Debt 42010 42013 42030 securities issued 42033 42050 42053 42070 42073 42110 42113 in manat, Total 17. Debt securities issued 42020 42023 42040 42043 42060 42063 42080 42083 42120 42123 in foreign currency, Total 18. Other liabilities 45011 45012 45079 45270 in manat, Total 19. Other liabilities 45021 45022 45089 45280 in foreign currency, Total 20. Other liabilities 45290

in precious metals, Total 21. Deposits of legal entities attracted in the national currency, total (rows 1+4+7+10+16+18)

22. Deposits of individuals and private entrepreneurs attracted in the national currency, total (row

23. Deposits of legal entities attracted in foreign currency, total (rows 2+5+8+11+17+19)
24. Deposits of individuals and private entrepreneurs attracted in foreign currency, total (row 14)
25. in precious metals, total (Row 3+6+9+12+15+20)
26. The share of linked deposits in total deposits, %
27. The share of related party deposits in total deposits, %
28. Reserve requirements (in manat)
29. Reserve requirements (in foreign currency)
30. Reserve requirements (in precious metals)

The reserve requirement Deposits of legal entities≤1 billion (750 million), Share of linked deposits in total deposits≤ L1, Share of related party deposits in total deposits≤ L2 Deposits of legal entities≤1 billion (750 million), Share of linked deposits in total deposits> L1, Share of related party deposits in total deposits≤ L2 Deposits of legal entities≤1 billion (750 million), Share of linked deposits in total deposits≤L 1, Share of related party deposits in total deposits>L 2 Deposits of legal entities≤1 billion (750 million), Share of linked deposits in total deposits>L 1, Share of related party deposits in total deposits>L 2 Deposits of legal entities>1 billion (750 million), Share of linked deposits in total deposits≤L 1, Share of related party deposits in total deposits≤L 2 Deposits of legal entities>1 billion (750 million), Share of linked deposits in total deposits>L 1, Share of related party deposits in total deposits≤L 2 Deposits of legal entities>1 billion (750 million), Share of linked deposits in total deposits≤L 1, Share of related party deposits in total deposits>L 2 Deposits of legal entities>1 billion (750 million), Share of linked deposits in total deposits>L 1, Share of related party deposits in total deposits>L 2 Nationa l currenc y MEN1 MEN2 MEN3 MEN4 MEN5 MEN6 MEN7 MEN8 Foreign currenc y MEN9 MEN10 MEN11 MEN12 MEN13 MEN14 MEN15 MEN16 Precious metals MENqm1 MENqm2 MENqm3 MENqm4 MENqm5 MENqm6 MENqm7 MENqm8 Table 2 (manat) Liabilities Balance accounts Balance on balance accounts Total Day 1 Day 2 ... Last calendar day of the month 35215

1. Due to the non￾resident financial sector 35218 35265 35268 35295 35298 35325 35328 35375 35378 35405 35408 35435 35438 35485 35488 35515 35518 35545 35548 35595 35598 35625 35628 35715 35718 35755 35758 35775 35778 35931 35933 35939 in manat, Total 35225 35228 35240 35243 35275

2. Due to the non￾resident financial sector 35278 35305 35308 35335 35338 35350 35353 35385 35388 35415 35418 35445 35448 35460 35463 35495 35498 35525 35528 35555 35558 35570 35573 35605 35608 35635 35638 35725 35728 35740 35743 35765 35768 35785 35788 35941 35943 35949

in foreign currency, Total 3. Due to the non￾resident financial sector 35235 35238 35250 35253 35285 35288 35315 35318 35345 35348 35360 35363 35395 35398 35425 35428 35455 35458 35470 35473 35505 35508 35535 35538 35565 35568 35580 35583 35615 35618 35645 35648 35951 35953 35959 in precious metals, Total

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri 4. Settlements with international financial institutions 37042 in manat, Total 5. Settlements with international financial institutions 37053 37054 in foreign currency, Total 6. Settlements with international financial institutions 37063 37064 in precious metals, Total 7. Total, in manat (Row 1+4) 8. Total, in foreign currency (Row 2+5) 9. Total, in precious metals (Row 3+6) 10. Reserve requirements (in manat) 11. Reserve requirements (in foreign currency) 12. Reserve requirements (in precious metals) Table 3 Total Reserve requirements (in manat) Total Reserve requirements (in foreign currency) Total Reserve requirements (in precious metals) CEO: Chief accountant: Date:

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri Notes to Table 1:

1. Balance of each balance account is recorded in the column of the relevant day. 2.The total column includes the sum of daily balances of balance accounts in the reporting month (excluding Rows 26 and 27). 3.The total column of Rows 26 and 27specifies the average daily figure for the month.
2. Balances of balance accounts shown below should be calculated as follows: in manat: Balance of account 25011 should be deducted from the balance of account 45011. Balance of account 25012 should be deducted from the balance of account 45012. Balance of account 25079 should be deducted from the balance of account 45079. Balance of account 25270 should be deducted from the balance of account 45270. in foreign currency: Balance of account 25021 should be deducted from the balance of account 45021. Balance of account 25022 should be deducted from the balance of account 45022. Balance of account 25089 should be deducted from the balance of account 45089. Balance of account 25280 should be deducted from the balance of account 45280. in precious metals: Balance of account 25290 should be deducted from the balance of account 45290.
3. Balances for non-working days are taken in the amount of the previous working day.
4. L1- Limit set by the Central Bank on the share of linked deposits in total deposits (on legal entities and individuals in national and foreign currencies).
5. L2- Limit set by the Central Bank on the share of related party deposits in total deposits (on legal entities and individuals in national and foreign currencies).
6. Required reserves to be maintained with the Central Bank are calculated as follows: in manat: Total of Row 21 (≤1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): ME1= Total of Row 21 + Total of Row 22 *MEN1 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): ME2= Total of Row 21 + Total of Row 22 *MEN2 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): ME3= Total of Row 21 + Total of Row 22 *MEN3 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): ME4= Total of Row 21 + Total of Row 22 *MEN4 the number of days in the reporting period

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri Total of Row 21 (>1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): ME5= Total of Row 21 + Total of Row 22 *MEN5 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): ME6= Total of Row 21 + Total of Row 22 *MEN6 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): ME7= Total of Row 21 + Total of Row 22 *MEN7 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): ME8= Total of Row 21 + Total of Row 22 *MEN8 the number of days in the reporting period In foreign currency: Total of Row 23 (≤750 mln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): ME9= Total of Row 23 + Total of Row 24 *MEN9 the number of days in the reporting period Total of Row 23 (≤750 mln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): ME10= Total of Row 23 + Total of Row 24 *MEN10 the number of days in the reporting period Total of Row 23 (≤750 mln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): ME11= Total of Row 23 + Total of Row 24 *MEN11 the number of days in the reporting period Total of Row 23 (≤750 mln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): ME12= Total of Row 23 + Total of Row 24 *MEN12 the number of days in the reporting period Total of Row 23 (>750 mln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): ME13= Total of Row 23 + Total of Row 24 *MEN13 the number of days in the reporting period Total of Row 23 (>750 mln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): ME14= Total of Row 23 + Total of Row 24 *MEN14 the number of days in the reporting period Total of Row 23 (>750 mln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): ME15= Total of Row 23 + Total of Row 24 *MEN15 the number of days in the reporting period Total of Row 23 (>750 mln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): ME16= Total of Row 23 + Total of Row 24 *MEN16

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri the number of days in the reporting period In precious metals: Total of Row 21 (≤1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): MEqm1= Total of Row 25 *MENqm1 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): MEqm2= Total of Row 25 *MENqm2 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): MEqm3= Total of Row 25 *MENqm3 the number of days in the reporting period Total of Row 21 (≤1 bln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): MEqm4= Total of Row 25 *MENqm4 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (≤ L2): MEqm5= Total of Row 25 *MENqm5 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (> L1) and Total of Row 27 (≤ L2): MEqm6= Total of Row 25 *MENqm6 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (≤ L1) and Total of Row 27 (>L2): MEqm7= Total of Row 25 *MENqm7 the number of days in the reporting period Total of Row 21 (>1 bln.), Total of Row 26 (> L1) and Total of Row 27 (>L2): MEqm8= Total of Row 25 *MENqm8 the number of days in the reporting period Where, ME1 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 ME2 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 ME3 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri ME4 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 ME5 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 ME6 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 ME7 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 ME8 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEN1 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MEN2 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEN3 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEN4 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEN5 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MEN6 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEN7 – required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEN8 - required reserves to be maintained if the total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 ME9 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 ME10 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri ME11 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 ME12 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 ME13 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2. ME14 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 ME15 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 ME16 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEN9 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MEN10 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEN11 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEN12 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is less than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEN13 – required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MEN14 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEN15 –required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEN16 - required reserves to be maintained if the total amount of deposits of legal entities in foreign currency is more than seven hundred fifty million manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEqm1 – required reserves to be maintained on liabilities in precious metals if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri MEqm2 - required reserves to be maintained on liabilities in precious metals if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEqm3 – required reserves to be maintained on liabilities in precious metals if the total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEqm4 - required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MEqm5 – required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MEqm6 - required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MEqm7 – required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MEqm8 - required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MENqm1 – required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MENqm2 -required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is less than L2 MENqm3 – required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MENqm4 -required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is less than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2 MENqm5 –required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MENqm6 -required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is less than L2 MENqm7 –required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is less than L1, and the share of related party deposits in total deposits is more than L2 MENqm8 -required reserves to be maintained on liabilities in precious metals if total amount of deposits of legal entities in national currency is more than one billion manats, the share of linked deposits in total deposits is more than L1, and the share of related party deposits in total deposits is more than L2

Azərbaycan Respublikasının Hüquqi Aktların Dövlət Reyestri The specified differentiation is considered in the calculation of Rows 28, 29 and 30. Notes to Table 2:

1. Balance of each balance account is recorded in the column of the relevant day.
2. Required reserves to be maintained with the Central Bank is calculated as follows: In manat: ME= Total of Row 7 *MEN the number of days in the reporting period In foreign currency: ME= Total of Row 8 *MEN the number of days in the reporting period In precious metals: ME= Total of Row 9 *MEN the number of days in the reporting period Where, ME – amount of required reserves MEN – the reserve requirement set by the Central Bank Notes to Table 3: Total amount of required reserves to be maintained with the Central Bank is calculated with the following formula: Total in manat: Total required reserves in manat = Row 28 (Table 1) + Row 10 (Table 2)Total in foreign currency: Total required reserves in foreign currency = Row 29 (Table 1) + Row 11 (Table 2)Total in precious metals: Total required reserves in precious metals = Row 30 (Table 1) + Row 12 (Table 2)