Central Bank on Azerbaijan talks license revocation
Baku, Azerbaijan, Sept. 28
By Anvar Mammadov – Trend:
The closure of banks in Azerbaijan was initiated in order to reduce the negative impact of weak, unhealthy credit organizations on the country's economy, Deputy Chairman of the Central Bank of Azerbaijan (CBA) Aftandil Babayev said Sept. 28 at a meeting of the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship.
Babayev was answering the question by Azerbaijani MP Ilham Aliyev, who asked the reason for the withdrawal of licenses of such a large number of banks, and who also inquired whether it was possible to identify and solve their problems in a timely manner.
The process of closure, liquidation, revocation of licenses of banks is underway not only in Azerbaijan, a similar situation is observed in many countries, Babayev said.
“New members constantly join banking market, while old participants leave it,” he noted. “A bank’s license is revoked if the bank cannot fulfill its obligations in accordance with the law or if it voluntarily leaves the market.”
“Prior to license’s revocation, a bank receives recommendations to fix flaws in its work,” Babayev added. “The closure of banks in Azerbaijan is a normal process, and it is not new. During 25 years there was a time in the history of Azerbaijan when the country had more than 200 banks.”
Licenses of 10 banks were cancelled by Azerbaijan’s Financial Market Supervisory Body during 2016.
The licenses of the banks were cancelled as their assets were not classified in line with the law, they didn’t create adequate reserves and the aggregate capital of these banks doesn’t meet the minimum requirements [50 million manats]. In general, they haven’t fulfilled the regulator’s instructions.
Thirty-three banks currently operate in Azerbaijan.