Press Review 10/18/2017

Economic successes of the country, relations between banks and customers, and the situation with lending are the leading topics of today's press.

The newspaper Azerbaijan writes that economic development provides an opportunity to continue infrastructure projects. In this regard, the author recalls the meeting of the Cabinet of Ministers on October 9 with the participation of President Ilham Aliyev. The author gives excerpts from speeches at this meeting on economic indicators.

The newspaper Echo writes about lawsuits against private banks because of so-called problem loans. Unfortunately, most of the judgments today cannot be called objective, since they are presented in favor of financial organizations.

Azerbaijani banks gave loans to individuals and legal entities at interest rates of up to 30%, and after the devaluation of the national currency, borrowers stopped returning them. According to the current legislation, in such situations, banks can only sue their debtors, as they do not have the right to force their clients, for example, to sell real estate or a car to pay off the bills.

Only the court can make such a decision. According to the current legislation, banks within 90 days have to negotiate with the customers to persuade them to pay arrears on overdue loans. After the expiration of this period, banks receive a right to appeal to the court to get their funds back.

The Novoye Vremya newspaper publishes an article on the instability of the credit market. Today interest rates on deposits in foreign currency have sharply decreased. At the same time, there has been a decrease in the rates for manat deposits.

Credits in foreign and national currencies have fallen in price. Thus, the banks compensated for the reduction in revenues from lending due to lower costs.

While there is a tendency to reduce bank deposits, we should not expect lending to improve.

We should not live with illusions that in this way, from scratch, that is, without any economic motivation, it will be possible to revive the credit market.

The Central Bank does not think to reduce the base rate on loans, and therefore, there will be no reduction in interest rates for the population. Banks reduce interest on deposits, and only raise interest on loans. Thus, credit and financial institutions discourage their customers.