Azerbaijani National Bank to Work out Strategy to Develop Bank Sector for Next Three Years
Azerbaijan, Baku, 4 April / Trend corr. I.Khalilova / The National Bank of Azerbaijan (NBA) has begun to work out a strategy to develop the banking sector in the country for the next three to four years, it was reported by Rashad Orujev, the director of Department on Supervision over NBA credit organizations operations.
The strategy includes improving the existing bank legislation, upgrading the bank infrastructure as well as the institutional development of the banking system.
Presently, increasing the capital and efficiency of the process further is still being assessed, Orujev said. However, it will be possible to make changes on the demands to capitalization in the new banking strategy.
The current capital rate is assessed as medium compared to European countries and higher than in the most other countries. However, this rate is not adequate for capitalization of the banking sector in relation to the dynamic development of economy.
Presently, there areno plans to increase capital in the banks, as the latest plan to achieve10mln mark estimated by 1 July 2007, was not fulfilled by some banks. The further increase of capital is connected with the increase of risks within the banking system.
Azerbaijan's banking system reached the highest development rate as a result of foreign holdings and shareholder capital into the country. During one year, the bank assets went up 72%, liabilities 59% and deposits 48%.
The increasing bank resources were directed towards finance investment demands of the non-oil sector of economy, which enabled the formation of macro economic balance. In 2007, the growth rate of credit investments totaled 83% and long-term credits doubled.
Taking into consideration the risks of globalization, NBA's main strategy for 2008 will be directed to maintaining financial stability. Therefore, there are plans to strengthen the banks' immunity against foreign and internal fluctuation, expansion of corporative management, transfer of risk zones to management, as well as upgrading the bank risks management system.
As of 1 January 2008, the joint bank assets comprised AZN 6,725,7mln, credits AZN 4,553,7mln, population deposit AZN1,468,4mln and banks joint capital AZN 1,009,1mln.
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