Regulatory Alerts2025-09-18
Regulations on the Calculation of Bank Capital and Its Adequacy
The Central Bank of the Republic of Azerbaijan issued Resolution No. 16/1-2 to establish comprehensive rules for calculating total regulatory capital, adequacy ratios, and leverage ratios for all domestic banks and foreign bank branches. The regulation mandates a minimum capital of AZN 50 million, defines Tier I and Tier II components, specifies deductions for intangible assets and equity investments, and assigns risk weights to on- and off-balance sheet liabilities based on credit ratings and collateral. Banks must implement ongoing capital management and assessment processes, including stress testing and internal audits, to ensure their capital levels remain aligned with risk exposure and financial sustainability.
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