Photo: Trend News Agency

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.