Central bank tightens rules for remote lending: What, how, and when will change?

The Central Bank has made changes to the rules for managing credit risks.

In the bank, these changes were linked to the improvement of the regulatory framework in the field of remote financial services - in order to reduce risks and strengthen the protection of consumer rights.

This was announced on his Facebook page by member of the Committee on Economic Policy, Industry and Entrepreneurship of the Milli Majlis, deputy Vugar Bayramov, who also noted the following:

"According to the changes that will come into force in October this year, clients are given the opportunity to establish a voluntary restriction on the remote conclusion of consumer loan agreements and on increasing credit limits. That is, taking into account existing risks, a citizen will be able to limit for himself the possibility of receiving credit offers remotely. At the same time, any citizen, by sending a request through the Azerbaijan Credit Bureau, will be able to impose a ban on remote loan processing in all credit organizations. According to the new changes, citizens can also contact directly the credit organization of which they are clients and establish a restriction only in relation to this organization. Credit organizations are obliged to check for the presence of such a ban before remote loan processing and issue a loan only if there is no established restriction."

According to the deputy, another change in the rules concerns the application of a "waiting period" when transferring funds under consumer loan agreements concluded remotely: "Thus, if the loan amount does not exceed twice the minimum wage, the funds will be credited to the account after 2 hours, and if this amount is exceeded - after 24 hours."

V. Bayramov emphasizes that although the introduction by the Central Bank of bans related to remote lending is a positive step, this approach is still rather traditional in nature: "Obviously, the reason for the introduction of such bans was cases when hackers, under the guise of remote loan processing, fraudulently stole citizens' funds. During 2024–2025, as a result of cybercrimes and hacker attacks, financial damage totaling 22 million manats was recorded, and about 17 thousand fraudulent transactions with bank cards were registered. All this, along with the introduction of bans, and perhaps even to a greater extent, has actualized the need to further strengthen security systems. It is difficult to predict how large the number of citizens who will submit a corresponding request through the Azerbaijan Credit Bureau will be. In this case, it is the statistics on citizens who have exercised the right to establish a ban that will show to what extent the new rules will be effective."

The deputy also notes that although the introduction of the "waiting period" is in itself a positive aspect, it would be more appropriate to apply a tranche system for remote lending: "The fact is that twice the minimum wage for some loans is a very small amount, and for others - a significant part of the entire loan amount. In this regard, the following approach seems more appropriate: to open an initial tranche in the amount of up to 5% of the loan amount, but not more than the minimum wage, and to pay the remaining part of the funds within a day after the borrower confirms receipt of the first tranche."

"In addition to all of the above, one of the extremely important aspects is increasing the financial literacy of the population. Until awareness of financial and banking services is properly expanded among citizens, hackers will try to use any available opportunities. At the same time, such explanatory work should be carried out not only by the Central Bank, but also by various, primarily independent, interested parties (stakeholders)," - concludes Vugar Bayramov.