Baku, Azerbaijan, Feb. 5
By Maksim Tsurkov - Trend:
Insurance reserves of Azerbaijan Deposit Insurance Fund of individuals (ADIF) increased after the joining of Caspian Development Bank [which previously operated under the name Kauthar Bank] to the fund, the executive director of Azerbaijan Deposit Insurance Fund of individuals (ADIF) Azad Javadov told Trend Feb.5.
He said that today the insurance reserves of the fund amount to 92 million AZN.
The official exchange rate on February 5 is 0, 7844 AZN / USD.
Bank regained the right to accept deposits after changing its business strategy due to the change of shareholders.
"After Caspian Development Bank joined ADIF, the number of members increased to 43," said Javadov. "All dues and calendar payments were made, which made it possible to increase the insurance reserves of the fund."
Currently, the work on the introduction of a differential premium system (a system of insurance premiums on a market basis) continues, he said.
"Now we are developing the legal framework," said Javadov. "In December, our delegation visited Kazakhstan to learn from their experience. Prior to that, a seminar on the theme of differentiation of insurance premiums was organized together with Turkey. Under such system, all deposits of the individuals will be insured."
The current law allows the fund to participate in the management of the bank, which was declared bankrupt, or to act as liquidator of the bank. Changes in legislation will make it possible to extend the status of ADIF to loss minimizer (entry into the member banks that are under threat of bankruptcy by the version of regulator, and participation in their rehabilitation) or risk minimizer (entry into the member banks that are under threat of bankruptcy, according to the own estimates of the fund and participate in their rehabilitation).
He went on to add that there is no outflow of deposits in Azerbaijan after the introduction of income tax on deposits in 2015. "During the year, the deposit portfolio grew by more than 9 percent, and reached 6.677 billion AZN," said the head of the fund.
Deposits placed in member banks of ADIF, at an annual interest rate of over 9 percent are not insured by the fund and the compensation for them is not provided. The change of the interest rate is not planned for now, according to Javadov.
Depositors do not make any payments for the insurance of their savings, insurance payments are made only by the banks themselves.
ADIF started operating on August 13, 2007. At present, 43 of the 45 banks operating in the country are members of the fund.
Edited by CN
Follow the author on Twitter: @MaksimTsurkov