BAKU, Azerbaijan, October 19. Azerbaijan’s MuganBank was not a systemically significant bank, its share in the banking sector of the country was quite small, a member of the Committee of the Milli Majlis (Parliament) of Azerbaijan on economic policy, industry, and entrepreneurship, Vugar Bayramov told Trend.
"In the banking system, the share of MuganBank was 1.4 percent of assets, two percent of the loan portfolio, and 1.3 percent of liabilities. Therefore, the revocation of the bank's license will not have a significant impact on the banking sector as a whole. The data of the Central Bank shows that 99.9 percent of deposits in MuganBank are insured. Their return will be possible in a shorter time because these are insured deposits," he said.
Bayramov also said that the closure of the bank raises some other issues.
"First of all, Azerbaijani citizens should be very careful when placing deposits in banks. They should pay special attention to the issue of timely submission of financial statements by the bank, its indicators. It is also very important to place funds in the form of an insured deposit. The current rules show that the annual percentage of protected deposits should not exceed 12 percent in Azerbaijani manat and 2.5 percent in foreign currency," he said.
The license of Mugan Bank was revoked on October 19, 2023, by the decision of the CBA Board dated October 18, 2023, in accordance with Articles 16.1.6, 16.1.7, 16.1.9, 16.1.18, 57, and 61. 1 of the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 three 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 has been appointed and an appeal to the court on the liquidation of the bank due to its bankruptcy has been prepared.