Azerbaijani Central Bank: Increased capitalization requirements good sign for foreign investors

Business Materials 8 October 2012 18:07 (UTC +04:00)

Azerbaijan, Baku, Oct. 8 /Trend A.Akhundov.

The recent decree issued by the Azerbaijani Central Bank (CBA) on the fivefold increase of the minimal capitalization requirements is a positive sign for investors, CBA General Director Rashad Orujev noted.

According to the decree of CBA as of July 25 the amount of associated capital of acting banks as well as authorized capital of newly established banks will be increased from 10 million manat ($12.7 million) to 50 million manat ($63.7 million). The new requirement to capitalization of acting banks will come into force on January 1 2014.

"This is a positive sign, as we are trying to strengthen the stability of bank system, which has successfully outlasted world financial crisis with no serious loss," Orujev added.

In his words, major brand banks are interested in entering Azerbaijani market.

"Some foreign brand banks, such as German Commerzbank and American Citibank, are willing to operate in our market, they have established rep offices. The reason for them not to enter the market yet is domestic problems. These problems are caused by global crisis. But the banks are still considering entering Azerbaijani market. This is a matter of time, " Orujev noted.

Roughly 43 banks operate in the country, 23 of which have foreign capital. The share of foreign capital is formed within 50 to 100 per cent in 7 of them, within 50 per cent in 14, there are 2 local branches and 5 missions of foreign banks.