Azerbaijan, Baku, June 1/ Trend , N.Ismayilova/
The ban on taking deposits from its members and burdensome taxation delays development of credit unions in Azerbaijan, the chairman of the Association of Credit Unions of Azerbaijan Elchin Baghirov said in his interview with the Business Time magazine.
"It is very important to improve the law "On credit unions", or adopt a model law developed by WOCCU for the countries of Eastern Europe," Bagirov said.
According to international expert analysis, which was attended by 32 of the 48 credit unions - members of the association, seven credit unions were equal to Category A (top category), 20 - Category B (medium) and only five in the category C (low).
According to the expert, credit unions of category A could to accept deposits from its members at the pilot stage, as in the international practice.
All credit unions from 96 countries around the world have the right to accept deposits from its members, as this is the basis for alliances, but in Azerbaijan, it is prohibited by law "On credit unions".
Bagirov said prudential norms for credit unions, for which financial activities are regulated by the Central Bank of the country, meets international standards and even they are more loyalty to the development of credit unions
Earlier, Director of the Legal Department of the Central Bank Rena Malikova said the CBA plans to update the Law, adopted in 2000 to regulate the activities of credit unions in the country.
"After adopting this law, the World Organization for credit unions, developed a model code in 2005, which we are currently studying, and if there is a need for adjustment of the law, then we will consider," Malikova said.
Meanwhile, at present contradictions with the Civil Code arouse on the management issues. In this context, the law is currently being analyzed from a practical point of view, and if necessary, it will be amended, the CBA lawyer said.
According to the law "On credit unions", these non-bank credit organizations are created, composed of 11 men and carrying out credit operations through the financing of its own members. They just like banks, should make a quarterly report to the CBA. The law is not supposed to accept deposits from the public credit unions.
The largest countries in the world promote the development of credit unions, seeing in them, along with private and national banks, which is fully developed financial services sector.
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