Azerbaijan conducts a policy of liberalization of the banking sector and today the banking sector meets the Basel standards. The general director of the National Bank of Azerbaijan (NBA), Rufat Aslanly, told Trend that the limitations on the opening of branches of the foreign in Azerbaijan were linked with the facts that some countries where these financial institutions have been registered were involved on laundry of dirty money and financing terror. Such countries numbered 7, whereas now there is only one, Aslanly stressed.
However, the NBAs position remains to be radical in respect to proposals submitted by some member-states of the World Trade Organization in respect to opening of direct braches of foreign banks, which will act on the base of the rules of the central banks, but nit the national legislation.
That is the demand of the United States and the European Union. They want us to undertake a commitment on possible opening of direct branches of foreign banks in Azerbaijan, which will function on the base of procedures of the central office. But that is not requirement set by the WTO, therefore we enjoy a right to accept them, but should come to a consensus, the General Director of the NBA said.
Besides, there is no limitation on the opening of a direct braches in Azerbaijan and there is branches of Melli Bank Iran and the national Bank of Pakistan in Azerbaijan. the limitation are laid only on assets and the NBA commits the branches of foreign banks to classify the assets in line with the rule of the NBA, which are more conservative. The conservative approach was selected on the base of recommendations put forward by the WB and the USAID, that we have been cooperating for 4 years, due to financial risks. Today the rating of Azerbaijan is lower than the United States and the EU, therefore are obliged to put forwards more conservative requirements on the banks assets, Aslanly underlined. However, this year the sovereign rating of the country is expected to increase and the achievement of an investment rating will remove the necessity for conservative approach twats the bank assets. But it requires time for implementation, or other requirements.
One more requirement set for foreign banks concerns the capital. While opening a branch in Azerbaijan they should reserve a sum equal to stock capital of the banks active in the country. Aslanly does not share the opinions which urge on conduct of protectionist policy in Azerbaijan in respect to foreign banks. Several years the NBA placed at Financial Times an ad inviting the foreign banks to Azerbaijan. Now there are 18 banks with foreign capital in Azerbaijan.