By the end of 2006 KFW of Germany plans to make the final review of the draft В"Deposits InsuranceВ", said Natik Abdullayev, head of KFW Baku office. German bank is providing consulting services in the draft development.
National Bank of Azerbaijan informed KFW of the draft approval in parliament in first reading and German bank considered this a progress, said Abdullayev. Upon the law coming in effect, KFW plans to issue E 5mln credit to establish initial charter capital for Deposits Insurance Fund and E 1mln for miscellaneous operations.
In order to create the system of deposits collective and mandatory insurance the said Fund will be established as a legal entity and non-commercial organization. An executive director will be appointed to manage the Fund.
The tutorial council at executive director will consist of seven people, from which three are NBAs officials, two from related executive authority and two from member-banks.
The entrance fee for banks amounts 10k AZN.
The said law shall be passed at fall session and come into effect January 1, 2007. right upon its passing, it will cover deposits in amount of up to 4k AZN till January 1, 2008, up to 6k AZN till 2010 and up to 8k AZN starting 2010.
The draft stipulates the banks participation in this Fund on a mandatory basis.