The main challenges banks face in Azerbaijan in recovering problem assets are related to legal and enforcement proceedings.
According to a Report correspondent in Shamakhi, Azer Amirov, Director of the Legal Department of the Azerbaijani Deposit Insurance Fund, made the remark at a forum on the occasion of National Press Day.
According to him, not only the fund, which is acting as a liquidator for banks, but also existing banks face challenges in this regard.
“However, existing banks have greater opportunities than banks undergoing liquidation. Using their existing financial resources, they can restructure loans, allocate additional financing, and take more flexible steps to recover problematic business loans. Furthermore, their clients are more responsible in fulfilling their commitments, as they cooperate with existing banks not only on loans but also on other banking services,” he noted.
The head of the department added that problems with loan processing, collateral issues, and other issues often lead to delays in legal proceedings to recover problematic loans or in the enforcement of court decisions.
Amirov emphasized that banks undergoing liquidation are primarily experiencing problems with the repayment of large business loans, while the situation with consumer loans is somewhat better.
He added that, given court and enforcement decisions, managing and recovering problematic assets at banks undergoing liquidation is a significantly more complex process.
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