CBA: Requirements of commissions by some Azerbaijani banks for operations with 500 EUR not violating law

Finance Materials 26 August 2019 15:49 (UTC +04:00)

Baku, Azerbaijan, Aug. 26

By Kamala Mammadli – Trend:

Azerbaijani citizens complain about problems faced when carrying out exchange or other types of operations with 500-euro banknotes in Azerbaijani banks.

Persons experiencing such a problem told Trend that when exchanging for Azerbaijani manats or depositing cash into an account, some banks require a commission of 1 percent for each 500-euro banknote.

As such, Gulnara M. told Trend that she wanted to put 6,000 euros in her current account in a bank in Baku.

"The bank said that a commission of 1 percent will have to be paid for every 500-euro banknote, that is, 60 euros for the whole amount. Before that, I bought euros in another bank. As a result, in order to avoid additional costs, I returned to them and asked to exchange 500-euro banknotes for any other banknotes,” she said.

In response to Trend’s appeal for comments, Central Bank of Azerbaijan (CBA) said that, in accordance with the Azerbaijani legislation, each bank can independently determine its terms of service, as well as commission fees for any operations.

"When crediting a 500-euro bill to an account, commercial banks can apply commission fees in accordance with their tariff policy," CBA said.

An expert in the field of finance told Trend that banks should not apply a certain rule to only one denomination of banknotes.

“If banks apply a particular rule, it should apply to the entire currency as a whole,” the expert said, adding that, under the current circumstances, it can only be advised to citizens to refuse purchasing such banknotes from banks, or to contact those financial institutions that do not apply similar commissions.

Trend’s survey showed that some banks and, in particular, NBC Bank, do not refuse accepting 500-euro banknotes and do not require any commission for this.

The EU completely refused to issue banknotes with a denomination of 500 euros. Since April 2019, the printing of these bills was discontinued in Germany and Austria. The rest of the eurozone countries took a similar step back in January 2019.

However, banknotes of 500 euros have not been withdrawn from circulation in Europe, and they can be used without any restrictions. Their withdrawal from circulation is carried out gradually, as the banknotes received at banks are not put back into circulation. Moreover, there are no deadlines set for the said process.

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