Regulatory Alerts2025-09-19
Regulation on Prudential Ratios and Credit Risk Requirements, Including Large Exposures
The Central Bank of the Republic of Azerbaijan issued Resolution No. 29/1-2 to establish prudential ratios and credit risk limits for domestic banks and foreign bank branches. The regulation caps maximum credit risk on a single borrower or related group at 25 percent of Tier I capital, limits aggregate large exposures to eight times Tier I capital, and mandates specific loan-to-value and debt-to-income thresholds for car, real estate, and consumer loans. Banks must calculate these ratios by deducting eligible collateral and securitizations, report large exposures monthly, and rectify any ratio violations within sixty calendar days.
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