📌Encumbrance is the restriction of the right of ownership to movable property for the purpose of securing the performance of an obligation.
🏷️ What is the encumbrance of movable property?
Banks register movable property as collateral for obligations in the state register in two ways:
Assets with a specific register: Registered with specialized state institutions.
🔸 Automobiles — State Traffic Police
🔸 Specialized machinery (tractors, combines, etc.) — Ministry of Agriculture
🔸 Bonds — National Depository Center
Assets without a separate register: Gold, funds in accounts, equipment, inventory, etc. These are registered through an electronic portal in the State Register of Encumbrance of Movable Property (SREMP) managed by the Central Bank.
🏷️ What is the purpose and significance of the State Register?
🔸 Access to finance: Facilitates access to loans for SME entities by allowing them to pledge movable property that lacks a specific register.
🔸 Transparency and verification: Enables accurate determination of whether the property has been previously encumbered under another obligation.
🔸 Risk management: In the event of borrower insolvency, it provides conditions for the prompt liquidation of collateral to repay the debt.
🏷️ Who can use the register system and how?
🔸 Financial institutions (banks and NBCOs) licensed by the Central Bank of the Republic of Azerbaijan (CBAR).
🔸 Through official user accounts (profile/login) specifically allocated to these institutions by the Central Bank.
🏷️ What is an encumbrance notice and what information does it contain?
🔸️ For each item of movable property entered into the SREMP portal, a special encumbrance notice with a unique number is generated.
🔸️ This notice reflects essential details such as the credentials of the parties, a description of the collateral, as well as the scope and duration of the obligation agreement.
