Azerbaijan, Baku, Oct 8 /Trend A.Akhundov/
Azerbaijani banks have the potential to bring their capital into line with the new requirements for capitalization, General Director of the Central Bank of Azerbaijan (CBA) Rashad Orujov told Trend.
According to the CBA board's decision dated July 25, the minimum total capital of existing banks and authorized capital of newly established banks increased from the \10 million manat ($12.7 million) to 50 million manat ($63.7 million). The new requirement will come into force from January 1, 2014.
"Of course, we have analyzed the situation in the banking sector, the potential of the country's banks, as far as they ability to meet the new requirements in detail and thoroughly before making this decision. There is enough time to accumulate the additional capital," Orujov said.
He noted that the bank is flexible in this regard.
"We have had this experience -- the last time we raised the demand from 2.5 million manat to 10 million manat, or by four times. We always thoroughly handle this issue. We believe that the banking sector has the potential to comply with the new requirement. Today banks, which own more than 70 percent of the system's assets, already have capital in excess of 50 million manat. Other banks, in our view, have the potential to bring the capital to the standard level," Orujov said.
He added that the bank does not see major threats or challenges that may arise from this decision.
There are 43 banks in Azerbaijan.