“The government should support banks,” Samir Aliyev

Baku/03.04.20/Turan: “In connection with the situation  due to the spread of the coronavirus, there are suggestions that banks soften their positions on the issue of repayment of loans. For this, first, the government should support the banks,” the economist Samir Aliyev said this in an interview with Turan.

He noted that without government support, banks would not be able to relax their customers.

In his opinion, one of the steps could be to change the rules for classifying problem loans.

“There is a certain period during which if the loan is delayed, then in this case it is considered problematic and the bank must allocate funds from its budget to cover the problem loan. I believe that the Central Bank should temporarily freeze these rules. In addition, the Central Bank must provide banks with inexpensive loans so that they, in turn, simplify credit conditions,” the expert said.

Samir Aliyev believes that in this situation, problems with the repayment of loans is the main difficulty for banks.

“If an entrepreneur does not work, it means that he has no profit,” he said.

Another negative impact of the current situation on the banking sector, the economist considers the hype created immediately after the fall in oil prices.

“The population hastened to exchange the manats in their hands for dollars, to take their deposits in national currency from banks. All this, of course, has a negative impact on the banking sector. These processes may again lead to dollarization of the banking sector, as many will prefer to deposit in US currency,” he concluded. -71В-