MP: Tax deduction from deposits reduced volume of deposits

11:51 - 31.03.2023

March 31, Fineko/ Taxation of deposit income in banks since last month has led to decrease in the volume of population’s deposits in banks.

ABC.AZ reports that MP Vugar Bayramov wrote about this on his Facebook account.

According to the MP, for the first time since August 2021 a decrease in the volume of population’s deposits in banks was recorded:

"According to the Central Bank, last month, on the first day of this month, population’s deposits in banks fell from AZN 11.928 bn to AZN 11.9 bn."

The MP stressed that over the past month the savings of the population decreased by AZN 27 million:

"The main cause of decline in savings of the population relates to the taxation of deposit income in banks since last month. Thus, some expired deposits were not renewed or were withdrawn due to unrealized increases in total interest on deposits. According to monitoring data, most of this happened in the first half of February. Then the stabilization of the process was observed."

Bayramov noted that in the coming months, recovery in the growth rate of deposits is expected:

"At that, the reduction in the volume of deposits once again confirms that it is important to further strengthen direct communication with depositors in the banking sector. This work should be carried out not only by the central bank, but also by each bank individually."