Azerbaijani central bank: Kovsar Bank’s restoration is unreal

Business Materials 6 May 2013 18:32 (UTC +04:00)

Azerbaijan, Baku, May 6 / Trend A. Akhundov /

The Azerbaijani Central Bank (CBA) thinks it unreal to restore Kovsar Bank's work. Its license was previously abolished, CBA chairman Elman Rustamov told Trend today.

The Baku Appeal Court decided to annul the resolution of the Baku Administrative Economic Court No 1 regarding Kovsar Bank's bankruptcy on the basis of the appeal of a shareholder of the bank in April 2013.

The bank's license was liquidated in late 2010 because the CBA requirement on minimum total capital was not fulfilled, the requirements of banking legislation were violated and current activity was not conducted in a safe and prudential manner.

"The Baku Appeal Court's decision does not mean the restoration of the bank's activity," he said. "I think that this decision is odd, because the situation in the bank is clear. Actually it does not exist. This bank has almost negative total capital. No one knows how it can reach the mark of 50 million manat. There are other lawsuits from our side and other claims to this bank. I do not see the restoration of its activity in the near future. This is unreal and wrong, because this bank is an outsider on all indices."

The Azerbaijani Central Bank's new requirement on the total capital of banks worth 50 million manat will enter into force on Jan. 1, 2014.

"Kovsar Bank" was founded in 1989 as Universal Bank.

"Kovsar Bank" operated according to the Islamic banking principles. It did not give out loans at interest.

Kovsar Bank's license was canceled due to non-compliance with the CBA prudential norms in 2011. But the bank restored it through the courts.

The official exchange rate is 0,7845 AZN/USD on May 6.