ADIF to raise funds from Central Bank to pay depositors of closed banks (UPDATE)

Business Materials 29 July 2016 15:10 (UTC +04:00)

Details added (first version posted on 12:36)

Baku, Azerbaijan, July 29

By Anvar Mammadov – Trend:

Azerbaijan Deposit Insurance Fund (ADIF) will attract a two-year loan in the amount of 100 million manats from the country’s Central Bank (CBA) to pay compensations to depositors of closed four banks – Zaminbank, Dekabank, Kredobank, Parabank, said ADIF Executive Director Azad Javadov July 29.

“We have already appealed to Azerbaijan’s Central Bank in this regard and the credit line will be opened during the day,” said Javadov. “We have attracted a two-year loan, but I think we will finish its payment earlier.”

“We, as liquidators, are returning loans issued by these banks for the population,” noted ADIF executive director. “These funds, as well as calendar payments of the banks will enable us to complete earlier payments on credit debts.”

Javadov also noted that currently, ADIF has 26 million manats and about 20 million manats accounted for correspondent accounts of four closed banks.

“We think that we will receive nearly 15 million manats on closed banks every month and these funds will be directed for repayment of the CBA loan,” he added. “Therefore, we plan to attract additional funds from ADIF member banks.”

ADIF receives about 30 million manats per year thanks to calendar payments. Thus, ADIF’s funds are replenished every year. According to legislation, ADIF member banks are required to pay quarterly calendar payments in the amount of 0.125 percent (0.5 percent per year) of the total amount of insured bank deposits.

Azerbaijan Deposit Insurance Fund began to operate on August 13, 2007.