Some 20 banks may fully cover banking services demand
Azerbaijan, Baku, Nov. 16 / Trend A. Akhundov /
Roughly 20 banks could fully cover the demand for banking services in Azerbaijan, Chairman of the International Bank of Azerbaijan's (IBA) Board Jahangir Hajiyev told media today.
He made the statement while commenting on the recent decision of the Central Bank's capitalization.
According to the decree of the Central Bank, the minimum total capital of existing banks and the capital of newly established banks was increased from 10 million manat to 50 million manat. The decision of the Central Bank was adopted on July 25 2012.
"Around 43 banks is much for Azerbaijan," Hajiyev said.
However, the increase in the capital requirement is one of the ways to control their number in the market, there are other measures.
"The big banks, working with corporate clients, would raise capital without increasing the minimum requirement, as it is necessary to finance their operations," he said.
He said that the banks, dealing with micro-financing, do not need such big capital. They can live normally with less capital.
"I have always supported the market regulation of the banking sector and it is wrong to include all the same framework," Hajiyev said.
Regarding IBA plans on purchasing small banks in the domestic market, there are no such intentions as it is inexpediently.
IBA was established in 1992 as the successor of the Azerbaijan branch of "Vnesheconombank". IBA has a dominant position in the banking sector. The state share in the authorized capital of the bank is 50.2 percent, the remaining shares are distributed among private legal and physical entities.
The official exchange rate is 0,7848 AZN/USD on Nov. 16.