Central Bank of Azerbaijan revokes Gunay Bank's license (UPDATE)

Finance Materials 17 May 2023 11:50 (UTC +04:00)

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BAKU, Azerbaijan, May 17. The license of Azerbaijan's Gunay Bank OJSC has been revoked, Trend reports via the Central Bank of Azerbaijan (CBA).

By the decision of the Board of Directors of the Central Bank of the Republic of Azerbaijan on May 16, 2023, in accordance with articles 16.1.6, 16.1.7, 16.1.9, and 61.1 of the Law of the Republic of Azerbaijan, the license of Gunay Bank OJSC was canceled from May 17, 2023, and an appeal was filed to the court for the liquidation of the bank through bankruptcy.

The bank lost its license due to insufficient total capital and a low adequacy ratio (less than 3 percent). Moreover, the Central Bank reported on the unreliability and unreasonableness of the bank's current activities.

By the above-mentioned decision of the Board of Directors of the Central Bank, a temporary administrator was appointed in Gunay Bank OJSC, and all management powers of Gunay Bank OJSC, including the powers of the general meeting of shareholders of the bank, were transferred to the temporary administrator.

"The share of Gunay Bank OJSC in the assets of the country's banking system is 0.6 percent, in the loan portfolio - 1 percent, and in the liabilities of the sector - only 0.5 percent. The cancellation of the banking license of Gunay Bank OJSC is not a threat to the financial stability of the banking sector," the CBA said.

Gunay Bank OJSC is a member of the Deposit Insurance Fund, and the Fund will pay compensation for insured deposits of the population in this bank in accordance with the legislation.

"The liquidator appointed by the court in accordance with the legislation will regulate the other obligations of Gunay Bank OJSC. According to the reports submitted by the bank to the Fund, at the end of the first quarter of 2023, the total amount of insured (reimbursed) deposits in the bank amounted to 38.5 million manat ($22.6 million). It is important to note that 99.9 percent of the bank's depositors will receive a refund on their deposits," the CBA said.