BAKU, Azerbaijan, October 19. Azerbaijani Mugan Bank's license has been annulled, Trend reports.
According to the Central Bank of Azerbaijan (CBA), the license of Mugan Bank was revoked on October 19, 2023, by the decision of the CBA Board dated October 18, 2023, in accordance with Articles 16.1.6, 16.1.7, 16.1.9, 16.1.18, 57, and 61. 1 of the Law of the Republic of Azerbaijan "On Banks" (the amount of total capital is less than the minimum amount established by the legislation for banks, the ratio of total capital adequacy is less than 3 percent, the bank does not carry out its current activities in a reliable and prudent manner, as well as due to inadequate internal management and control procedures of the bank).
A temporary administrator was appointed, and a petition to the court to liquidate the bank due to bankruptcy was drawn up.
By the above decision, all powers in the management of Mugan Bank, including the powers of the general meeting of shareholders of the bank, were transferred to a temporary administrator.
The data of the Central Bank of Azerbaijan shows that the share of Mugan Bank in the assets of Azerbaijan's banking system is 1.4 percent, in the loan portfolio, 2 percent, and in the sector's liabilities, only 1.3 percent. The cancellation of the Mugan Bank banking license does not pose any threat to the financial sustainability and stability of the banking sector.
According to the Central Bank's statement, since Mugan Bank is a member of the Deposit Guarantee Fund, compensations on deposits of population insured in this bank will be paid by this fund in accordance with the legislation. Other liabilities of Mugan Bank will be regulated by the liquidator appointed by the court in accordance with the legislation.
According to the reports provided by the bank to the fund, the insured (compensated) deposits of the bank amount to 216.7 million manat ($127.4 million) as of the end of the third quarter of 2023. Deposits of 99.9 percent of the bank's depositors will be compensated.
Yesterday, it was reported that Mugan Bank's ATMs were not working.