13:03 - 16.03.2020

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March 16, Fineko/abc.az. Last week the parliamentarians discussed the amendments to the Law on Full Deposit Insurance and made a decision to extend the term of full deposit insurance until 9 December.

Thus, the deposits were fully insured for the period of nine months. The small amount of time was met ambiguously by experts and the public. So how will the short-term of full deposit insurance affect the banking sector?

We addressed with this question to expert Ekrem Hasanov.

Hasanov informs ABC.AZ that the reduction of the term will lead to the gradual withdrawal of a small part of deposits (mainly foreign) from banks by the end of the year, and most of them will be distributed among several banks.

The expert justified his opinion in the following way: "This means that already now the depositors will take measures to avoid risks after the expiration date at the end of the year. And this will relatively correct the existing imbalance between banks. In other words, there will be an end to the concentration of deposits only in a few banks. This is also a positive phenomenon. Therefore, as a whole I don’ot see any problems in this matter."

By Elmir Murad