The Central Bank of the Republic of Azerbaijan has approved a new Rule on managing operational risks in banks, as part of its effort to align the banking regulatory framework with recommendations of the Basel Committee on Banking Supervision. The measure is designed to strengthen banks’ operational continuity and enable quicker responses to events in the operating environment to help prevent material financial losses. The rule sets requirements for banks’ operational risk management systems, including the identification, assessment and monitoring of operational risks, internal and supervisory reporting arrangements, and the creation of a database of operational risk events. The Central Bank expects implementation to expand banks’ existing incident data, improve the precision of loss measurement from operational risk events, and support the use of more sophisticated approaches to operational risk capital requirements in future periods.
Central Bank of the Republic of Azerbaijan 2025-02-13
Central Bank of the Republic of Azerbaijan approves new rules on banks’ operational risk management aligned with Basel guidance
The Central Bank of the Republic of Azerbaijan has approved a new Rule on managing operational risks in banks, aligning with Basel Committee recommendations. The rule mandates banks to enhance their operational risk management systems, including risk identification, assessment, monitoring, and reporting. Implementation aims to expand incident data, refine loss measurement, and support advanced approaches to operational risk capital requirements.