Schedule of increase of bankвЂ™ aggregate capita to be defined in 2006
вЂњIn 2006 the National Bank of Azerbaijan (NBA) plans to define a schedule of by-stage increase of the aggregate capital of the existing banks to 50bn manats ($10mn),вЂќ Alim Guliyev, vice chairman of the Management Board of the NBA, told Trend. The requirement must be implemented by the banks during the subsequent two years (2006-2007).
By the beginning of 2006 the minimal amount of the aggregate capital should comprise $5m. As of totals of three quarters of 2005, 7 banks of Azerbaijan have an aggregate capital yielding the level set by the standards documents. Early 2005 such banks numbered 19. Thus, only 7 banks hold the aggregate capital in the amount attaining 17.5bn manats, or 7% of total aggregate capital of the local banks.
As of 1 October 2004 there have been 27 similar banks (35.6%), as of 1 January 2005 - 19 banks (24.5%). As of the end of the reviewed period 13 banks had the capital in the amount of from 17.5bn manats to 25bn manats with a share of 18.4% (6 (13.7%) and 10 (17.2%)), 16 banks - from 25bn to 50bn manats with the share of 33.1% (9 (38.8%) and 10 (27.7%)), 6 banks вЂ" over 50bn manats вЂ" with the share of 41.5% (1 (18%) and 4 (30.6%)). Thus, at present the standard requirement as of early 2006 was implemented only by 22 banks with the share of 74.6% in the total capital.
A resolution on the twice increase of capital of banks was linked with the NBAвЂ™s supposition on the insufficiency of the current level for the resolution of forthcoming strategic tasks. The flow of oil revenues to the country, efficient transformation of the funds through financial-banking sector to the development of the oil sector makes the capitalization of the banking system as important.
The NBA puts similar demand for the newly established banks, though at the moment of establishment their statutory capital was to comprise $10m. The requirement for the capital of new banks will be increased to 50bn manats from 1 January 2006, whereas now the figure is 25bn manats.