Regulatory Alerts2021-01-07
Regulations on Determining the Mechanism for Repayment of Foreign Currency Loans Increased in Manat Due to Devaluation and Accrued Interest and Penalties
The Financial Markets Supervisory Authority of Azerbaijan issued these regulations to establish a standardized compensation and restructuring mechanism for individuals’ foreign currency loans that increased in value against the manat following devaluation. The framework mandates state-funded compensation to offset principal debt increases, applies full or proportional write-offs on accrued interest and penalties, and introduces preferential five-year loans at a one percent annual rate for restructured overdue debts. Credit institutions must calculate compensation amounts, issue fee-free payment cards or process cash transfers, and submit restructuring data to an electronic portal while resolving disputes through a dedicated appeal committee.