Supervisory Board of Deposit Insurance Fund of Azerbaijan to Approve Insurance Reserves Management Procedures Abroad
Azerbaijan, Baku, 12 July/ Trend , corr I. Khalilova/ The consultant of the Deposit Insurance Fund of Azerbaijan (ADIF) Global Banking Development Solution from Germany is completing the development of procedures to place the bills of the Fund in the high rating securities of the foreign banks and financial institutes, Azad Javadov, executive director of ADIF said. The foreign manager of the bills of the Fund will determined after the procedures are approved.
Deutche Invest, the daughter company of Deutchebank made presentation for the Fund, but the manager will be selected after ADIF procedures are approved, Javadov said. He is hopeful that the German development bank will grant a loan to capitalize ADIF by the time ADIF bills are placed. The loan agreement worth €5mln has been forwarded to the government for consideration.
The accumulated funds are invested in the state t-bills of the Ministry of Finance for an efficient management. The average income of the bonds amounts to 10%. A total of AZN2.5mln has been invested in t-bills with the revenues of the fund worth AZN5.549,000 as of 1 April 2008.
ADIF is going to place its bills in the high rating securities of the foreign banks and financial institutes which must have rating not lower than AAA.
At present, 8% of funds of ADIF are invested in euro, 41% - in manats and 51% - in USD.
According to the legislation, Fund can save up to 5% of its revenues out of all banks deposit or AZN50mln. The portfolio of deposits of the physical entities among member banks (they total to 37) amounted to AZN1.497.79 in the first quarter.
The limit of the accumulations can be increased due to the rise in the banks deposits. The annual rise in the deposits makes up 40% to 60%.
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