TODAY.AZ / Business

Parabank to turn into NBCO

16 December 2016 [14:36] - TODAY.AZ

By Azernews

By Nigar Abbasova

Azerbaijan will see the first transformation of bank into non-banking credit organization (NBCO) in the short run.

A juridical decision will soon be taken on the transformation of Parabank, which lost its license in accordance with the decision of the Financial Market Supervisory Body (FMSB) dated July 21, 2016.

That was reported by Azerbaijan Deposit Insurance Fund (ADIF), which performs the role of a liquidator in the bank. After the transformation, a new financial institution will issue bonds for its depositors.

“The institution will be able to retain a part of depositors of the liquidated bank. Clients, not wishing to transfer their deposits to NBCO will get compensations on their deposits, while depositors of the NBCO will be able to invest financial means in bonds and get profit.”

The decision on the issuance of bonds and conditions of the emission will be taken by the NBCO.

 As of December 7, ADIF completed payment of compensations to insured depositors of Parabank. The volume of paid compensations amounted to 42.9 million manats ($24.54 million). The volume of uninsured deposits in Parabank stands at 43 million manats ($ 24.60 million). Uninsured depositors will be offered to put the financial means in bonds. FMSB gave the permission to transform Parabank into NBCO in October 2016.

Non-banking credit organizations in Azerbaijan do not have the right of raising deposits from the population.

The license of Parabank was revoked due to the failure to comply with statutory minimum capital requirements of the regulator as well as to manage activities in a safe and prudent manner.

Currently, 32 banks possess licenses for the implementation of banking activity in the country.

URL: http://www.today.az/news/business/156992.html

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