Azerbaijan plans to guarantee up to 80 percent of deposits
Azerbaijan, Baku, Feb. 27 / Trend , N.Ismayilova/
The National Bank of Azerbaijan (NBA) has developed a new version of the Bill on Insurance of deposits. The Bill will allow to guarantee 80 percent of deposits insured through the Azerbaijani Deposit Insurance Fund (ADIF), NBA Board chairman Elman Rustamov said.
"Serious changes are expected to be made to the insurance of deposits. NBA insists on increasing deposits to several times. This will allow to insure up to 80 percent of deposits," Rustamov said.
The changes to the Bill have already submitted to the parliament.
"We proposed to instruct NBA Board to determine the level of insured sum and ADIF Trustee Council the dependence of guaranteed deposits from rates," Rustamov said.
Since early 2008, 100 percent compensations are paid in the term that the sum of deposits not to prevail 6,000 manat. Since Jan.1, 2010 the sum will be increased up to 8,000 manat. ADIF covered deposits up to 4,000 manat on the basis of bill on Insurance of deposits as for Jan. 1, 2008.
This measure is taken to increase the population's confidence to the banking sector of the country due to the global financial crisis.
The ADIF will not insure bank deposits with a rate over 5.4 percent yield since March. This is due to NBA's decision to reduce rate to three percent. This decision will cover new deposits.
Deposits attracted under the annual percentage rate that is over NBA rate by 1.8 percent will not be insured.
The ADIF member banks will not pay calendar deposits with over than 18 percentage of annual due to deposits attracted under 5.4 percent of annual will not be insured since March.
Since October 2008, the rate dropped from 15 to three percent in Azerbaijan.
The ADIF was established on Aug. 13, 2007. Fund has 40 operating banks.
On Feb. 27, the official exchange rate is 0.8052 manat to $1.
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