Baku, Azerbaijan, Oct. 3
By Azad Hasanli - Trend:
Former leadership of the International Bank of Azerbaijan (IBA) has committed very serious mistakes, Azerbaijani Finance Minister Samir Sharifov said Oct.2.
He made the remarks during the discussion of the draft state budget for 2016 at the joint session of parliamentary committees on economic policy, social policy, agrarian policy, natural resources, energy and ecology, as well as security issues.
"In this regard, almost all who worked in the leadership of the bank were suspended from their posts," he said. "At present, law enforcement authorities are involved in certain inspections at the bank, because in some cases legal assessment of the acts committed is needed."
In some cases, loans were issued without pledged securities, and if the object of pledge was present, it couldn't be compared with the amount of the loan, etc., according to the minister.
"Given the fact that it is a core bank, which is also the largest bank not only in Azerbaijan but also the Caucasus region, the head of state signed a decree on rehabilitation of the bank and its preparation for privatization in order to protect the interests of depositors," Sharifov said, adding that work in this direction is already underway.
On July 15, 2015, President of Azerbaijan Ilham Aliyev has signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the International Bank of Azerbaijan JSC.
The shortcomings in the management, investment and loan policy of the International Bank of Azerbaijan in recent years, as well as financing of less efficient, risky investment projects worsened the bank's financial state, caused increase in the share of distressed assets and reduced its liquidity, said the decree.
In order to overcome the current situation, restore the bank's financial position and ensure its sustainability, there is a need to transfer the bank's distressed assets to the state-owned Aqrarkredit CJSC non-banking credit organization.
Aqrarkredit CJSC is the largest non-bank credit organization, whose shares belong to the state, and it operates since 2001.
The International Bank of Azerbaijan was established in January 1992.
The bank's main shareholder is the Azerbaijani government, which holds 51.07 percent of shares, while private individuals and legal entities hold the remaining shares.