As part of the joint project with the World Bank “Modernization of the financial sector”, the Central Bank of Azerbaijan (CBA) approved the “Policy Concept for the Introduction of Risk-Based Supervision”.
As Day.Az reports with reference to the CBA, this concept is aimed at creating an effective supervisory system in the financial sector in accordance with international best practices, which ultimately helps to minimize systemic risks in the financial sector.
It is noted that the document will also ensure communication of the Central Bank with the local and international community regarding the new approach to supervision.
Within the framework of the Concept, a risk-oriented supervision system ARAS (Azerbaijan Risk Assessment System) was developed, which includes early identification of risks associated with the activities of supervised entities, their assessment and assessment of risk management processes, as well as the introduction of proportional and preventive supervisory mode.
The document conceptually covers the period of risk-based supervision, defining the organizational structure of the supervisory process, including the functions of the Supervisory Committee and other structures. The Oversight Committee will perform functions such as approving oversight instructions, making informed judgments, reviewing oversight practices, and presenting draft annual oversight plans and priorities to the Board for review.
The text of the document can be found at the following link:
Policy Concept of the Central Bank of the Republic of Azerbaijan on risk-based control