Azerbaijan Banks Association offers to create e-auction system for collateral property sale

Finance Materials 22 May 2019 17:19 (UTC +04:00)

Baku, Azerbaijan, May 22

By Aysham Rustamova – Trend:

The Azerbaijan Banks Association (ABA) has submitted a proposal to the government in connection with the creation of an e-auction system for the property pledged in the banks and put up for sale by a court decision upon overdue loans in the banks, Gorkhmaz Aghayev, ABA expert in legal issues, told Trend on May 22.

“The proposal is conceptual,” he added. "The details of using this system are considered. The proposal has already been submitted to the Azerbaijani Presidential Administration, Financial Market Supervisory Authority of Azerbaijan (FIMSA) and other structures."

He went on to say, “There will be a number of advantages thanks to this system. The new system will create transparency in the auction system for selling property upon the court decisions. The current auction system is inefficient. The information about the auction must be available to both the buyer and the seller.”

Aghayev noted that citizens hardly receive information about the bank and the defendant, whose property is being put up for auction. “The closed or difficult access to this information creates great obstacles to the implementation of the system. As a result, banks are forced to transfer this property into their own property, which is wrong. The e-auction will speed up the process after a court decision is issued,” he said.

"E-auctions will allow reflecting specific information about the property including its price, location and other details. Citizens will be able to register and take part in the auction. As a result, sales will be accelerated, banks will not have to decided what to do with this property, and the court decisions will be implemented in a timely manner without additional court costs. Moreover, not only residents of the country, but also those living abroad may participate in these auctions,” Aghayev added.

“Furthermore, it will facilitate the flow of additional currency into the country,” he said. “The use of an e-auction system is aimed at simplifying and speeding up the process, ensuring transparency and reducing the cost of auctions. The work on the electronization of the system is underway in ABA and in the Justice Ministry. The experience of European countries is also being considered.”

Aghayev stressed that the e-auction system which gives good results is widely used in European countries and in neighboring Georgia.

“The changes are required to launch the system,” he said. “Presently, the auctions are arranged only by bailiffs.”

He noted, “The process can be more transparent if independent companies are involved. In this case, the prices will be lower. Auctions can also be held directly by the Justice Ministry. The process depends on the will of all interested parties.”

In conclusion, he added that the system may be launched within three-six months.