Head of NBA: Accumulating-Savings Banks on German Scheme to Be Established in Azerbaijan

Politics Materials 20 February 2007 20:55 (UTC +04:00)
Head of NBA: Accumulating-Savings Banks on German Scheme to Be Established in     Azerbaijan

Azerbaijan , Baku / corr . Trend I.Khalilova/

During the meeting of the Caspian Integration Business Club, Elman Rustamov, the Chairman of the Board of the National Bank of Azerbaijan (NBA) is preparing to submit Draft "On Accumulating-Savings Banks" to the Azerbaijan Government in March, 2007, Trend reports. That will be the German scheme and envisages a parallel scheme with mortgage crediting.

"It is very important from the point of view of stimulating savings of the population. The scheme works as follows: one collects some funds as an initial payment within three years. On the completion of this term, credit resources are automatically granted to the remaining part to pay a purchase of accommodation," said Mr. Rustamov. According to him, such a scheme is widely spread in Europe . He considers that with the introduction of the scheme, Azerbaijan will lighten the Budget to a certain degree, since the existing scheme of mortgage crediting is fully locked within the budget financing, since it is impossible to place mortgage securities at the terms of 6-8% annually.

The above-mentioned institutions are not expected to be found on the base of the existing banks. "This is very specific institutions and they will not render other banking services. As funds are accumulated, they may place the funds to state securities and notes. The institutions will be regulated by a separate bill," said Mr. Rustamov.

The authorized capital of the accumulating-savings banks will have no particular role, since the banks will work with minimal risks. Such requirements are likely to be applied to future banks.

The Head of NBA does not rule that a new light approach will be introduced. These banks may be pure state-controlled ones or be in private or state ownership.