Azerbaijani Finance Ministry discloses amount of compensation on problem loans

The Azerbaijani Ministry of Finance has so far allocated 430.6 million manats to pay compensation on problem loans to individuals, spokesman for the ministry Mais Piriyev told Trend on May 16.

“On May 8-14, upon the appeal of the Financial Market Supervisory Authority of Azerbaijan (FIMSA), the Finance Ministry transferred 53.5 million manats and 26.3 million manats in two tranches to the banks’ correspondent accounts at the Central Bank to implement Azerbaijani President Ilham Aliyev’s decree,” he added.

“Taking into account the Finance Ministry’s first tranche worth 350.8 million manats for paying compensation, the amount of funds transferred so far to the correspondent accounts of the postal operator and banks, including those which are being liquidated, reached 430.6 million manats,” Piriyev said.

The process of paying compensation on problem loans to individuals started in Azerbaijan on April 22, 2019. The payments are made through branches of banks and Azerpost postal operator. As expected, 602,347 people will receive compensation. The compensation is planned to be fully paid till late May 2019.

Earlier, President Aliyev signed a decree on additional measures in connection with solving the issue of the individuals’ problem loans. The decree envisages the payment of compensation to citizens whose loan burden increased as a result of the devaluation of the manat in February and December 2015.

According to the decree, opportunities are created for restructuring both US dollar loans and manat loans with a delay of more than 360 days on concessional terms. If the amount of compensation exceeds 500 manats, these funds will be transferred to the account of the individual; otherwise, the payment will be made via money transfer.

The corresponding plastic cards to be received by individuals are issued free of charge for a period of one year. Banks and postal operator are not entitled to charge fees for issuing or conducting operations with these cards or for making money transfers.