ABA president: Azerbaijani banking system has successfully built relations with int'l financial institutions (INTERVIEW)

ABA president: Azerbaijani banking system has successfully built relations with int'l financial institutions (INTERVIEW)

Azerbaijan, Baku, March 17 / Trend N.Ismayilova / 

Azerbaijan's dynamic development calls for accelerating systemic banking sector reform, including the introduction of new banking technologies, expansion of banking services and wider involvement of economic actors to banks handling funds. Commercial banks should work together to solve common problems, enhance cooperation with governmental and non-state structures and actively establish business relations with international financial institutions to successfully implement these tasks. The Azerbaijani Banks Association (ABA) was established to join the efforts of the banking sector.

In March, the association celebrates its twentieth anniversary. Over these years, the ABA has held successful activities aimed at supporting banking sector development. ABA President Eldar Ismayilov gave information on achievements and future plans in an interview with Trend .

Trend : The ABA prepares to celebrate its anniversary. What is the ABA's role in the positive trends observed in the Azerbaijani banking system?

Ismayilov: The association was established 20 years ago. Even then, commercial banks needed to jointly address many common challenges in the banking system. Over these years, the association has achieved several successes and setbacks, but overall it has successfully operated and grown.

Today, the ABA has three subsidiaries, the most advanced of which is the Azerbaijani Banking Training Center (ABTC), which is also celebrating its 10-year jubilee in 2010. The second structure is the Banks and Business magazine, which is also quite successful. The third is the Banking Information Technology Center, which provides general banking software products, but we still need to do a lot more in this direction.

The association has built a fairly stable relationship with the Central Bank of Azerbaijan and productively cooperates with the Tax Ministry. Of course, there are complex issues that have still not been addressed, but it is encouraging that the ministry has become more sensitive to the needs of banks in recent years. We still have a lot to do with the judiciary, which still has many unresolved issues.

In recent years, our banks have become fairly well integrated into the international financial and banking system. The ABA seeks to develop integration processes and make a modest contribution to our country becoming a regional financial center.

We have built and now successfully develop relations with international financial institutions and banking associations. In particular, we have signed contracts with 13 banking associations of foreign countries. It is very important because our economy is closely linked to these countries. We need to ensure that our banking systems were also closely linked and the banks can operate simultaneously and support cash flows with their activities.

We have entered into various international banking communities and participate in regional banking alliances. This is, first and foremost, the CIS International Banking Council and Eastern Europe and the European Banking Federation (EBF), of which we are associate members. Baku will host a regular annual EBF field meeting May 28 that will be attended by the presidents of banking associations of almost all theh European countries. This will certainly be a great event for Azerbaijan's banking community.

In 2008, the ABA initiated the establishment of the Coordination Council of Banking Associations of GUAM Countries. Together with the Azerbaijani Foreign Ministry, we held the international conference, "Integration of GUAM Countries' Banking Systems."

Q: What is the association's activity toward the establishment of the Central Eurasian Federation of Banks Associations? How many countries have acceded to the agreement?

A: Presently, the process of establishing this new regional bank union in underway. Theoretically, it will include the Banking Association of the Central Caucasus, Central Europe and Central Asia. To date, the federation includes the banking associations of Azerbaijan, Belarus, Georgia, Kyrgyzstan, Tajikistan, Turkey and Ukraine. These associations have already signed an agreement on the federation's establishment, whose headquarters will be located in Baku. The constituent documents of the federation are under review by the Justice Ministry and I hope these processes will be completed in 2010.

Q: What kind of problems is the banking banking sector facing and what must be done to solve them?

A: It is a broad question and I would, with your consent, limit my answer to those aspects that concern ABA's activity. Firstly, we support banks and non-bank credit organizations in order to coordinate various issues with the legal authorities.

Joint work is required in several directions, but the so-called problem loans have a priority.

Overcoming the difficulties in fulfillment of judgments is extremely urgent for banks in the country. I am sure that eventually we will be able to reestablish the judging attitude to the issues of mortgage and compensation of loans. Today, problems with the tax policy are also important.

The staff potential of Azerbaijani banks has already been formed, but we have to do much work to introduce international standards and this sharply increases the demand for management and executive staff. The process of improving professional skills of bank employees, including abroad, should be persistent and much more intense.

Q: The Central Bank said that only 15-20 banks operate on a satisfactory level? According to the upcoming CBA strategy on consolidation and optimization of the banking system, how many mergers can be expected?

A: Azerbaijan is in the process of building a new economy, which is optimizing everything and I am sure the system will "filter out" the banks. The main thing is banks to comply with the law. The process of the country's economic development will determine which banks and non-bank credit organizations will survive, and which will have to form mergers or simply close.

In 1994, over 230 commercial banks worked in Azerbaijan and now there are only 46 banks some of which were opened recently.

Perhaps, Azerbaijan doesn't need 15-20 system-forming banks but only three or four. there is no any universal method for determining their number. Clearly, however the economy can not be served by only system-forming banks. International practice shows that only 10-12 common, not system-forming banks fall to each system-forming bank. Therefore, the policy of the Azerbaijani Central Bank is based on the same benevolent attitude towards all the banks - both large and medium-sized and small.

Q: Is there any progress in the establishment of a single-payment system in the CIS?

A: A single-payment system, which is a step towards the restoration of the ruble zone, is actively discussed not only in the banking community but in certain political circles, especially in Russia.

Perhaps "the game is not worth the candle" if CIS states seek to recreate the ruble zone, but this desire doesn't exist. The dollar and the euro are stable in CIS countries and now the Chinese yuan and the Japanese yen are increasingly used in the area.

The Russian ruble is not strong enough a currency and is under the pressure of the U.S. dollar and the euro, which are deeply rooted in Russia's own currency and occupy a specific niche there.

Much is determined not by the wishes of politicians or banks, but by the state of the economic integration processes in the states and in particular the share of their mutual trade. For example, the CIS countries' trade turnover is only 15 percent of their total foreign trade turnover, while the remaining 85 percent come from export-import operations. In other words, most foreign mutual settlement of accounts is realized in U.S. dollars and euros and cardinal changes in this sphere are not expected in the foreseeable future.

The ABA was established by 10 private banks March 29, 1990 (Universal, Development Bank, East Bank, Togrulbank, Khazri, Azerdemiryol Bank, Deka-Bank, Azernegliyatbank, Azmanbank) and was registered as an Azerbaijani Association of Commercial and Cooperative Banks.

The association operates under its present name since 1999, and today all banks operating in the country are its members.

Do you have any feedback? Contact our journalist at [email protected]

Subscribe to Trend in Google News! Subscribe
Construction costs in Georgia's Tbilisi increase
Construction costs in Georgia's Tbilisi increase
Georgia's giant auto dealer expanding South-West, opens branches in Ukraine, UAE
Georgia's giant auto dealer expanding South-West, opens branches in Ukraine, UAE
Georgia names main suppliers of coal
Georgia names main suppliers of coal
Loading Bars
Latest
Iran approves creation of national cryptocurrency
Navy holds high level meeting on creation of Maritime Theatre Command
Azerbaijan's Azer Turk Bank announces net profit for 2021
Food-processing enterprises may be built on Azerbaijan's liberated lands - deputy minister
Turkey records increase in export of ready-made clothing to Azerbaijan
Turkey’s export of steel to Azerbaijan up
Azerbaijan sees rise in domestic money supply for 2021
India Inc proposes additional 1% CSR levy for booster shots
Azerbaijan to get another batch of Sputnik V vaccine against COVID-19 in 2022
Women interested in creating business on Azerbaijani liberated lands - agency
Construction costs in Georgia's Tbilisi increase
Azerbaijan, WB discuss ways to use wind energy potential of Caspian Sea (PHOTO)
Turkmengaz opens tender to buy plant equipment
Azerbaijan Children Hotline released its report for 2021 (PHOTO)
European Commission to support agriculture reform, transition to green economy in Uzbekistan
President of Azerbaijan Ilham Aliyev calls President of Ukraine
SOCAR Turkey talks on integration of innovation solutions at STAR Refinery
Pfizer and BioNTech launch trial of Omicron-targeted COVID vaccine
French Lagazetteaz.fr online newspaper renews interface (PHOTO)
Timing of Azerbaijan-Iran intergovernmental commission's next meeting revealed
Demarcation of Armenia-Azerbaijan border to make sure no armed incidents happen - ex-CSTO Sec-Gen
Head of Development Bank of Kazakhstan dismissed
All Baku-Istanbul and Istanbul-Baku flights of AZAL postponed
J&J expects up to $3.5 bln in COVID vaccine sales this year
Iran to contribute to reconstruction of liberated territories of Azerbaijan - Iranian minister
SOCAR AQS, Iraq's IDC mull opportunities for co-op in drilling
Azerbaijan names timeframe of commissioning new bridge on border with Iran
Iran aiming to boost exports of fish products to South East Asian countries
I do hope that post-war period will open new opportunities for whole region - President Ilham Aliyev
Iranian company may become resident of industrial park in Azerbaijan - deputy PM
Abu Dhabi's Chimera closes second venture capital fund at $10 bln
I am sure that Iranian companies will start active work on liberated lands in near future - President Ilham Aliyev
Positive trend noted in enhancement of tax administration in Azerbaijan – minister
Georgia's giant auto dealer expanding South-West, opens branches in Ukraine, UAE
Istanbul's third airport suspends its work until January 26 - Turkish Airlines
Azerbaijan Army’s Engineering Troops continue activities on clearing roads of snow - MoD (VIDEO)
Turkmen tomatoes gaining share in foreign markets
Russia records over 67,800 COVID-19 cases in last 24 hours
Azerbaijan completing work on first "smart village" in Zangilan district
Azerbaijan, Iran may simplify border crossing procedure - minister
Azerbaijan talks results of flour, bread price monitorings
Azerbaijan, Iran sign protocol on construction of new bridge over Astarachay River (PHOTO)
New bridge over Astrachay River on Azerbaijan-Iran border to be built
‘Nar’ takes the title of Azerbaijan champion (PHOTO)
SOCAR Turkey names new target markets for Petkim’s products
Turkey reports rise in leather exports to Azerbaijan for 2021
SOCAR Turkey working on improving STAR-Petkim integration
Kazakhstan Electricity Grid Operating Company turns on all "North-East-South of Kazakhstan" transmission lines
Uzbekistan resumes operation of its airports
Karabakh to become most beautiful region of Azerbaijan soon – deputy PM
President Ilham Aliyev presents Istiglal Order to Chairperson of Organization of Veterans of War, Labor and Armed Forces of Azerbaijan (PHOTO/VIDEO)
Uzbekistan begins to restore electricity supply following power outages
Turkmen agriculture ministry opens tender for supplier selection
Turkey's chemical exports to Azerbaijan increase in 2021
President of Azerbaijan Ilham Aliyev holds videoconference meeting with Iranian minister (PHOTO/VIDEO)
Azerbaijani oil prices decline
Israeli envoy recalls key role of India in WW-I
Kyrgyzstan gradually restoring energy system after power outage in Bishkek
Uzbekistan accredits Russia's Gazprombank
Credit Suisse's problems mount as lender warns on Q4 profit
Israel mulls offering 4th COVID vaccine dose to all adults
Azerbaijan commissions several customs posts in liberated areas
Georgia names main suppliers of coal
Kazakhstan’s Almaty Int’l Airport operating as usual despite power outage in city
Uzbekistan discloses reasons for power outage
Uzbekistan suspends operation of airports due o power outage
Georgia to highly benefit from Turkish medicines – ministry
Azerbaijani First VP Mehriban Aliyeva congratulates Fatma Sattarova on 100th birthday anniversary (PHOTO)
Kazakhstan taking measures to eliminate accident that caused power outage – KEGOC
Russian company acquires stake in Uzbek cement plant
Loan portfolio of banks increases in Azerbaijan
Georgia reports new record high COVID-19 cases
Georgia’s Poti FIZ eyes launching new projects in 2022
Electricity supply facing security challenges, requires multiple services
Azerbaijani Defense Minister's visit to Iran starts
Kyrgyzstan’s Bishkek experiencing power outages across entire city
Azerbaijan’s role in solving global problems is growing - Analysis
Azerbaijan organizes movement of working trains on Zangazur corridor (PHOTO)
Kazakhstan Deposits Insurance Fund raises maximum recommended rates on deposits
Uzbekistan’s Tashkent Metro suspends operations
Kazakhstan reports large-scale electricity power outage in Almaty
ADB and Turkmenistan working on SME exporters’ project
Azerbaijani currency rates for January 25
Uzbekistan shares data on sectors driving GDP growth
Kazakhstan appoints chairman of Central Election Commission
Azerbaijan's export-import operations up in 11M2021 - WB
Georgia increases food safety system backed by EU
TPPs to play less role in flexible power system, says IEA
ITACA Training and Research Center opened at Baku Higher Oil School (PHOTO)
Azerbaijani AzFinance company’s bonds listed on Baku Stock Exchange
Azerbaijan opens criminal investigation against 297 Armenian citizen involved in war crimes
Iran's TEDPIX records drop
OSCE PA representatives to visit Kazakhstan
Oil prices rebound as growing geopolitical tensions fuel supply fears
FMs of Turkmenistan and Pakistan talk preparations for session of OIC Ministerial Council
Iranian currency rates for January 25
FMs of India and Turkmenistan talk wide range of issues of bilateral relations
Bhavish Aggarwal-led Ola Electric valuation tops $5 bn with $200 mn funding
Iran is likely to have direct talks with US - Iranian FM
Iran plans to reopen closed production factories
All news