CBA delays capitalization requirement implementation for one year
Baku, Azerbaijan, Nov. 15
By Emin Aliyev - Trend:
Azerbaijani banks, which do not fulfil the Azerbaijani Central Bank's (CBA) capitalization requirement by January 1, 2014, will have the opportunity to bring capital to the required level by the end of next year, CBA Chairman Elman Rustamov told journalists on Nov. 15.
According to him, the decision was made by the CBA on Friday.
"Today, 95 per cent of the banking sector has met the requirement to bring the total capital to 50 million manats or have time to do it before the end of 2013. As for the remaining five percent of banks, we develop customized programs for the capitalization of each of them in order to enable them to fulfil the regulatory requirement," Rustamov said.
According to him, the Central Bank does not intend to administratively remove these commercial banks from the market or to create difficulties for their operation.
"However, this does not mean that banks can relax. They need to work and grow," Rustamov said.
According to him, the requirement for capitalization was a response to the events connected with the global economic crisis.
"Other countries also had such precedents in order to protect themselves. As a result of this, the capital of the banking sector in Azerbaijan increased by 48 per cent," Rustamov said.
At present, eight banks of the country have capital exceeding 100 million manats. The indicator of capital adequacy of the banking sector in Azerbaijan is 17 per cent, which is much more than the established minimum rate in the world, Rustamov said.
The official exchange rate for Nov. 15 is 0.7844 AZN/USD.