Central Bank aligns bank capital and capital adequacy framework with Basel III Standards

06-01-2026

6 January 2026, Baku: Pursuant to the ‘2024–2026 Financial Sector Development Strategy’, and to strengthen financial stability in the banking sector and enhance compliance with international regulatory standards, the Management Board of the Central Bank of the Republic of Azerbaijan with its decision of 16 December 2025 adopted amendments to the ‘Regulations on calculation of bank capital and its adequacy’.

Under the amendments, the structure of bank capital, capital adequacy ratios, capital buffers, and a number of other requirements and regulatory provisions have been aligned with Basel III standards.  

The introduction of new capital buffers will enhance banks’ resilience to potential losses, enable more accurate risk assessment, improve the quality of bank capital, and provide additional support for the sustainable financing of the economy.

Furthermore, the completion of the alignment of capital requirements with Basel III standards will contribute to the strengthening of the prudential policy and supervisory framework, while also positively enhancing the attractiveness of the banking sector for international investors.

Banks have been granted a one-year transition period to adapt to the new capital structure, align internal rules and procedures with the new regulatory requirements, conduct the necessary sector-wide trainings, and integrate the new approaches into prudential reporting. Accordingly, banks will be required to fully comply with the new requirements starting from 1 January 2027.

The relevant amendments are available at the link below:

https://e-qanun.az/framework/61125