Regulatory Alerts2025-09-19
Regulation on Asset Classification and Creation of Specific Reserves for Loan Loss Provisioning
The Central Bank of the Republic of Azerbaijan issued Resolution № 29/1-1 to standardize asset classification and mandate specific reserve creation for loan loss provisioning across domestic banks. The regulation categorizes assets as standard or non-standard based on delinquency periods and quality criteria, assigning tiered reserve rates that vary by loan type, currency, and collateral valuation. It further establishes precise write-off thresholds, borrower income verification methods, and sector-specific rules for agriculture loans while excluding certain educational student loans.
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