Elman Rustamov: Issue of imposing restriction on loan interests in Azerbaijan removed from agenda

Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov commented on the bill on imposing restriction on loan interests in the country at the press conference on April 26, Report informs.

"The issue of imposing restriction on loan interests in Azerbaijan has been discussed and removed from the agenda. Our attitude to this issue was always negative. We think that it contradicts with the long-term structural reforms declared by President and works towards transition to deep market economy.

"We held a deep study of the offered issue. This practice is used in low-income countries. That’s if the inflation is not managed by economic methods, legislative steps are taken. Particularly, in the countries with low financial literacy, banks use usurious interests and government takes certain measures against it.

"Setting an interest rate ceiling may lead to regulation of economy with non-market methods, damage to links between financial sector and real sector. There were proposals to set a ceiling for deposit interests. How would it be true socially? Deposits are properties of the population. Moreover, restriction in interests may lead to withdrawal of money from the banking sector, develoment of shadow banking," he said.