Azerbaijan, Baku / corr Trend I.Khalilova / Six banks have not fulfill requirement set by the National Bank of Azerbaijan (NBA) on the minimum amount of aggregate capital, which is to comprise AZN 10mln by 1 July, the NBA said on August 31. The NBA is continuing the final specification of the results of estimation of the capitalization of the country's bank sector, whereas six banks were included into the initial list.
During a month the situation has improved. Thus, by 1 July the capital of 31 banks exceeded AZN 10mln, according to the NBA's statistic data. The capital of ten banks ranged between AZN 5mln to AZN 10mln and two banks from AZN 3.5mln to AZN 5mln.
There are 44 banks working in Azerbaijan, but Pochtbank does not carry out accounting, because its operations are completely restricted. Three banks - Kauthar Bank, Euro Bank (former AzInvestBank) and Azal Bank - function with restricted license (without permission for accepting deposit).
Simultaneously NBA is negotiating with the stockholders of the banks which did not fulfil the requirement in order to get familiar with their further capitalization plans. In accordance with banking legislation, there is a range of successive sanctions. Change of juridical status, restriction of bank license, recommendations on merge of capital with another bank is among the sanctions. The extreme sanction is withdrawal of banking license.Merge of capitals shall be initiated by the stockholders of the banks firstly.
The deposit attraction licenses of the banks avoiding the requirement will be suspended. So, they will not be able to join the Deposit Insurance Fund. They will have to consolidate or change their status to non-bank credit organizations, the director of the Department on Control over Credit Organizations of the NBA, Adishirin Gasimov, reported. Change of the status will be possible after adoption of the new law on Non-bank Credit Organizations.
The aggregate capital of all 43 banks operating in Azerbaijan increased by 39.5% compared to the beginning of 2007 (AZN 603.3mln to 1 January) making up AZN 841.7mln to 1 July.