The Central Bank of Azerbaijan (CBA) says unemployment insurance for consumer loans, offered by private insurers rather than the state system, could reduce banks' risks and capital requirements and potentially lower interest rates in some lending segments. Premiums would vary by borrower and sector according to unemployment risk, and CBA Director General Shahin Mahmudov said the overall cost of borrowing could fall in several segments even after premiums, though the extent depends on each bank's position. The regulator is also considering linking the interest-rate ceiling on protected deposits to market deposit rates instead of a fixed cap, using reference periods of nine months and three years plus a margin of around 2 percentage points. The final decision rests with the Deposit Insurance Fund.
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