Completion of International Audit of Agrar-Credit to Accelerate Transformation into Bank of Agriculture Financing

Business Materials 24 August 2007 17:37 (UTC +04:00)

Azerbaijan, Baku / Trend corr. I.Khalilova / The process of establishment of the Bank of agriculture financing on the base of non-bank credit organization of Agrar-Credit will be brisk up after completion of international audit financial-agriculture activities of Agrar-Credit.

Checking up is being held by KPMG company for two years of functioning 2005 and 2006.

Then meeting of share holders will be held annually, where the issue on distribution of incomes of credit organization will be defined.

Incomes of Agrar-Credit made up AZN 149,000 in 2005 and AZN 1mln in 2006. The incomes of Agrar0Credit should reach AZN 1,3mln in compliance with strategy for 2004-2007.

The main share holder of Agrar-Credit appealed to the National Bank due to transformation into the bank of the Finance Ministry. Presently, credit organization is functioning on the base of limited license and after injection changes, it is planning to issue permission for full bank functioning.

The main issue is to transform Agrar-Credit into bank with privatization in future. The Azerbaijani Finance Ministry jointly with National Bank of Azerbaijan must develop proposal on upgrade present financing and credit agrarian sector from institutional point of view by the order of the President due to the bill on 'State budget for 2007'. Proposals should concern creation of bank on financing agriculture.

Earlier Elman Rustamov, the head of National Bank of Azerbaijan, stated that agrarian bank should not be state one but the Government should participate at the process.

The European commission commenced to render technical assistance to Agrar-Credit to receive bank license and to open for privatization in future. The preliminary scheme of privatization of Agrar-Credit has been defined with EU by the end of 2008. However, term for its transformation to bank organization.

EU renders support in negotiations with European Bank of Reconstruction and Development. It is planning to transform 25% of shares to EBRD during privatization period of Agrar-Credit. Heads of credit organizations held meetings with representatives of European Bank; however, the final decision must be taken by the Government.

The main share holders of Agrar-Credit is the Azerbaijani Finance Ministry, which has 99.9% shares of credit organization, and the other parts have been equally distributed between insurance organization of Azersigorta and Land-reclamation and water industry company.