The Central Bank is changing the rules for issuing online loans

New requirements have been set in Azerbaijan for consumer loans arranged remotely.

As 1news.az reports with reference to APA, under a decision of the Central Bank of Azerbaijan, customers will be able to submit a written application to a bank or credit institution — a Non-Bank Credit Organization (NBCO) — to establish a restriction on the remote arrangement of a consumer loan or an increase of a credit limit. This restriction may be lifted on the basis of a written request by the customer, made in person at the bank, using an enhanced electronic signature or enhanced customer authentication.

When issuing a loan, banks and NBCOs will be obliged to check whether the customer has such a restriction in place, both through their own systems and through the information system of the credit bureau. It will be impossible to conclude a remote consumer loan agreement or increase a credit limit with a person who has established a restriction.

If a person who has established a restriction subsequently applies for a loan remotely or for an increase of the limit, the bank or NBCO will immediately notify the customer about this through a mobile application or by SMS.

In addition, under the new rules, funds for remotely issued consumer loans or increased credit limits will not be provided instantly. Thus, if the amount of funds issued or increased during the day is up to twice the minimum wage, the money will be issued 2 hours after the conclusion of the agreement or the introduction of amendments. If the amount exceeds twice the minimum wage, the funds will be provided after 24 hours have elapsed.

Furthermore, the consumer loan agreement will include a provision concerning the release of the borrower from obligations on the loan provided or increased. Consumer loan agreements arranged remotely, or amendments to an agreement related to an increase of the credit limit, will also reflect information on whether the borrower has established a restriction on obtaining a loan remotely.

Note that the decision enters into force on October 1.