Azerbaijani Central Bank pleased with Deposit Insurance Fund’s work
Azerbaijan, Baku, Aug. 27 / Trend A. Akhundov /
The Azerbaijani Central Bank (CBA) is pleased with the Azerbaijan Deposit Insurance Fund's work (ADIF) of providing the bankrupt RoyalBank depositors with compensation, CBA Director General Rashad Orujov said at the fifth annual meeting and workshop of the Eurasian Regional Committee (EARC) of the International Association of Deposit Insurance Fund in Baku on Monday.
"ADIF recently started giving compensation for the first time in its history," he said. "This was good experience for the Fund and the Central Bank. ADIF managed to show itself as an effective institution. As the regulator of the banking market in the country, CBA is pleased with its work."
ADIF started to pay out compensation to RoyalBank depositors through three agent banks since Aug. 1. The fund plans to pay about 16 million manat to pay compensation for the first time during its history,that is a third of its funds (currently the fund has 48 million manat).
Orujov said that this experience will allow the fund to reveal the areas for further development and will enable the fund to share experience with similar organisations in other countries.
"The relevance of deposit insurance systems has increased in the context of the global economic crisis since 2008," he said. "These systems are an important element in ensuring financial stability, improving public confidence in the banking system and protecting the interests of customers."
He added that five main principles - ensuring adequate legal and regulatory framework for the fund's activity, establishing the high-quality work of the institutions responsible for financial stability in the country, conducting adequate control by a regulator, namely the Central Bank; effective regulation by the banks and the development of the banking system as a whole were taken as a basis while establishing ADIF in 2007.
"The global economic crisis was a good test for the country and the banking system as a whole," he said. "We managed to successfully pass the test. The Deposit Insurance Fund was one of the important elements."
The official exchange rate is 0.7854 AZN/USD on Aug. 27.