BAKU, Azerbaijan, October 15. Banks in
Azerbaijan will be required to offer unemployment insurance to
customers taking out consumer loans, Shahin Mahmudov, director
general of the Central Bank of Azerbaijan (CBA), said at a press
conference on Thursday dedicated to the presentation of the
Financial Stability Report, Trend's correspondent reports from the event.
He noted, however, that purchasing the insurance would remain at
the customer's discretion.
“The new mechanism is expected to help reduce risks associated
with consumer lending,” he said.
Mahmudov said relevant rules were being drafted and regulatory
changes were being introduced to implement insurance mechanisms
aimed at reducing risks associated with consumer loans. The work is
expected to be completed by the end of the year.
“Insurance is one of the instruments that can help reduce risks
associated with consumer loans. Rules are currently being drafted
in this area. Under the proposed mechanism, banks will be required
to offer customers the relevant insurance products. However,
whether to take out insurance will remain the customer's choice,”
Mahmudov noted.
According to him, the insurance mechanism could help protect
customers against financial risks in the event of job loss and
other circumstances specified in the rules. This, in turn, is
expected to help reduce risks associated with consumer lending and
strengthen the resilience of the banking sector.
