Azerbaijan's CBA to extend risk-based supervision to other financial segments

Azerbaijan's Central Bank (CBA) plans to extend its risk-based supervision framework, already used in the banking sector, to other segments of the financial industry, Fuad Isayev, Executive Director of the CBA, said at the Sustainable Business: Corporate Governance, Risks and Compliance event in Baku, Report informs.

"The CBA does not seek to hinder development, but to ensure that it is healthy and sustainable. The changing risk environment presents various challenges for us as a regulator. Today, it would be incorrect to assess a bank's financial stability solely based on capital and liquidity indicators," he said.

According to Isayev, a cyberattack or the risk of violating international sanctions can expose a financial institution to significant financial and reputational losses.

"As a preventive measure, the CBA supports the establishment of a proactive and risk-based regulatory system," he emphasized.

The Central Bank representative noted that since the end of 2025, the banking sector has been using ARAS (Azerbaijan Risk Assessment System).

"In the next stages, a similar approach is planned to be introduced in other segments of the financial sector. This will make it possible to assess banks not only on the basis of financial indicators, but also from the standpoint of corporate governance and the effectiveness of internal control systems," Isayev added.