Capital requirements for payment & e-money organizations determined in Azerbaijan

The Collegium of the Central Bank of Azerbaijan (CBA) has approved the "Regulation on organization and implementation of activities by payment organizations and electronic money organizations," Azernews reports, citing Azerbaijan's Central Bank.

It was added in the report that Taleh Kazimov, the chairman of CBA, signed a new decision in this regard.

According to the decision, cash inflow and outflow operations on the payment account (1), credit transfer, direct debit, payment transactions with payment cards or other similar payment instruments (2), issuance of payment instruments and acquisition of the payment transaction (3) ) the requirement for the authorized capital of a payment organization that provides services together or any of them separately is 500 thousand manats. Besides, the requirement for the authorized capital of a payment organization that provides mediation services for money transfer and payment transactions is 100 thousand manats, and the requirement for the authorized capital of an electronic money organization is 750 thousand manats.

There is no capital requirement for the payment organization providing account information service. For every 100,000 payment service users, this organization must insure its civil liability in an amount not less than 50,000 manats from an insurer that is not related to itself and does not belong to the same financial group, or from a credit organization that is not related to itself and does not belong to the same financial group, or from an insurer for 50,000 manats. must get a guarantee of not less amount. The amount of civil liability insurance or guarantee is recalculated twice a year, on the last working day of June and December, based on the average number of users every 6 months, and updated within 10 working days if required. The organization submits the report on the calculation of the minimum amount of the civil liability insurance or the guarantee received to the CBA no later than the first 5 working days of July and January every year in accordance with this Regulation.

Also, the organization must have a minimum total capital, except for the cases of providing intermediary service and account information service for conducting payment operations. The main purpose of the total capital of the organization is to support the business strategy of the organization, to ensure the financial stability of the organization during unfavorable changes in the internal and external environment.

The minimum amount of the total capital of the organization must not be less than the minimum amount of the authorized capital determined by this Regulation and the amount calculated in the following manner. The average monthly payment volume equal to 1/12 of the payment transactions executed during the last 12 months of the payment organization is calculated, and coefficients according to the following table are applied to the payment organization:

- When payment volume is up to AZN 10 mln - 4 percent of the calculated amount

- When over AZN 10 mln and up to AZN 20 mln - 2.5 percent of the calculated amount

- When over AZN 20 mln and up to AZN 200 mln - 1 percent of the calculated amount

- When over AZN 200 mln and up to AZN 500 mln - 0.5 percent of the calculated amount

- and when over AZN 500 mln - 0.25 percent of the calculated amount

The Legal Department of the CBA was instructed to submit this Decision to the Ministry of Justice for inclusion in the State Register of Legal Acts within 3 days.