Azerbaijan Deposit Insurance Fund begins preparing to rank banks
Baku, Fineko/abc.az. The Azerbaijan Deposit Insurance Fund (ADIF) has begun preparations for ranking of the member banks.
ADIF executive director Azad Javadov has stated that the Fund’s delegation has already visited Kazakhstan, where the system of ranking of banks for deposit insurance purposes has already been formed.
"If our proposals for the differentiation of membership fees depending on the level of risk of the member banks are accepted, then we will be ready to begin their own rankings independently. Rating of the banks will be determined on the basis of their economic performance," Javadov said.
Such a system exists in 35 countries. In Azerbaijan, it may appear due to the draft amendments to the Law on Deposit Insurance, prepared with technical support of GBDS that acted within a grant of German development bank KfW. The amending document includes 18 amendments, including the proposal to extend the system of insurance to the accounts of individuals, acting without creation of a legal entity (individual entrepreneurs).
The main purpose of the amendments is to maximize the convergence of national legislation with the relevant directives of the European Commission.
According to them, it is suggested to reduce the time that passes between the occurrence of an insured event and the return of deposits to the depositor from 90 days (under current law) to no more than 14 days. It is also offered to introduce differentiated risk management system, which envisages setting the amount of the premium for the Fund’s member bank, depending on the assessment of its sustainability. The premium will vary from 0.1 to 0.5% of the amount of raised deposits with distribution on five categories - the lower is the risk of the bank, the lower are its payments. The ADIF itself will define ranking of banks. This practice has been already applied in 35 countries.
Today, among the ADIF members are 43 out of 44 Azerbaijani banks. The Fund insures 96% of depositors. Its assets are estimated at 37 million manat.
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