IMF hails plans for consolidation of Azerbaijan's banking system

Azerbaijan, Baku, March 3 / Trend N.Ismayilova /  

The International Monetary Fund (IMF) welcomed the Central Bank of Azerbaijan's (CBA) plans to consolidate the banking system and enhance competition among banks, Head of IMF mission to Azerbaijan Nienke Oomes, who is on visit to Baku for consultations under Article IV of the Agreement on the establishment IMF, said today.  

"The final decision on the consolidation issue has not yet been adopted," she said. "Presently, about 46 banks operate in the country and we regard this figure as fairly high number for such an economy, as in Azerbaijan."

According to her, the IMF supports the reduction in the number of banks, which will increase competition between them, facilitate the monitoring conducted by CBA and help reduce interest rates, which remain at a fairly high level.

Considering the recent decrease in rate of inflation, these measures should help in reducing interest rates, as well as in reducing the corridor between the interest rates on loans and deposits.

Oomes believes the strengthening of prudential regulations will help the country make a healthy banking system and this practice is now observed throughout the world.

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