BAKU, Azerbaijan, October 26. The license of Azerbaijan's MuganBank OJSC was revoked this month, Trend reports.
It was withdrawn from October 19, 2023 by the decision of the Board of the Central Bank of Azerbaijan (CBA) dated October 18, 2023 in accordance with Articles 16.1.6, 16.1.7,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 law for banks; the ratio of total capital adequacy is less than three percent; the bank does not carry out its current activities properly).
A temporary administrator was appointed and an appeal to the court on the liquidation of the bank due to its bankruptcy was prepared. Based on the decision of the Baku Court of Appeal, the Deposit Insurance Fund was appointed liquidator of MuganBank OJSC.
The CBA revoked the license of Azerbaijan's Gunay Bank OJSC on May 16, which was declared bankrupt.
Vugar Bayramov, a member of the Committee of the Milli Majlis (Parliament) of Azerbaijan on Economic Policy, Industry, and Entrepreneurship, told Trend that MuganBank was the 16th out of 24 banks operating in Azerbaijan in terms of assets.
"Banks with a small amount of assets operate in Azerbaijan. However, the volume of assets is not the only criterion. For nine months of the current year, along with MuganBank, losses were recorded in another bank. This suggests that there is a need to develop and implement a recovery program for banks that are considered relatively weak. We should witness not the bankruptcy of banks in the subsequent period, but their recovery. There is a need to strengthen the activities related to the support of these banks," he said.
Bayramov stressed that in general, there is a need in the banking sector to increase transparency, and support the construction of more efficient and flexible management.
"It is especially important to strengthen activities in the field of ensuring transparency in intrabank management. The situation with bankrupt banks shows that one of the emerging problems is poor transparency in the internal banking management," Bayramov said.