TODAY.AZ / Business

Two banks in Azerbaijan lose licenses

29 April 2020 [12:29] - TODAY.AZ

By Trend


In accordance with the decision of the Board of the Central Bank of Azerbaijan (CBA) dated April 28, 2020, the licenses of Azerbaijan’s AtaBank OJSC and Amrahbank OJSC were canceled on April 28, Trend reports referring to the CBA.

The financial condition of the mentioned banks has been on the decline for some time. AtaBank for a long time could not fulfill its obligations to return the clients' deposits. The share of these two banks having problems in the sector’s assets is 2.1 percent while in the loan portfolio - three percent.

The CBA conducted the inspections in both banks after the liquidation of the Financial Market Supervisory Authority (FIMSA) and the transfer of the relevant powers, defined upon the law, to the CBA, and revealed that both banks suffered big financial losses, completely lost their capital and went bankrupt.

The shareholders of the banks were informed about the results of the inspections. The proposal was made for them to additionally capitalize the banks, but they did not use this opportunity.

Taking into account the need to resolve the situation with commercial banks having the problems with financial stability, as well as in a manner coordinated with the relevant state agencies and the Deposit Insurance Fund, the detailed discussions were held in the Financial Stability Board and the Board’s recommendations on the decisions made by the CBA were taken into account.

The licenses of AtaBank and Amrahbank were canceled after both banks filed lawsuits to the court about the liquidation by bankruptcy.

AtaBank and Amrahbank are member-banks of the Deposit Insurance Fund and the savings of the population which are stored in these banks will be fully paid by the Fund.

In case of shortage of the Fund’s money, the CBA will issue a loan for the missing amount in accordance with the legislation, which will be repaid from the proceeds obtained from the sale of bank assets closed by the Fund and the calendar payment which is made by existing banks.

Other obligations of AtaBank and Amrahbank in accordance with the legislation will be settled by the liquidator, which will be determined by the court.

Two other banks - AG Bank OJSC and NBC Bank OJSC had temporary administrators appointed to them. The issue of withdrawing their licenses has not been discussed yet.

The CBA stressed that the country's banking system as a whole is stable, but reiterated that there are "pinpoint" problems in the system.

URL: http://www.today.az/news/business/193356.html

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