ADIF appeals to bank depositors

Baku. 24 April. REPORT.AZ/ Azerbaijan Deposit Insurance Fund (ADIF) appealed to bank depositors.

Report informs, ADIF informs that according to the Deposit Insurance Law, in case of reorganization of banks in the form of merger or incorporation each deposit transferred to the successor bank is considered a separate deposit until the end of contract and compensated.

“For instance let’s imagine that customer has AZN 20,000 insured deposit in each of AAA and XXX banks, which are members of the ADIF, and deposit agreements end in 2 years. The deposit is canceled within the term in force by merger of AAA bank with XXX bank. 6 months after merger the insurance case occurs. In such case, ADIF pays to depositor AZN 40,000 compensation”,report says.

The ADIF states that above mentioned example is important for case of incomplete insurance of deposits. Thus, as in cases when deposit is regarded as insured the complete amount is subject to full compensation according to requirements of the law on Complete Compensation of Deposits, 100% compensation for deposit is provided upon insurance case in ADIF member banks without application of conditions provided in Deposit Insurance Law.

“For example, let’s say that the customer has AZN 100,000 deposit in each of AAA and XXX member banks of the ADIF. AAA bank is eliminated after joining XXX bank. Insurance case occurs in XXX bank while Deposit Insurance Law is in force. In such case, depositor will be paid total AZN 200,000 – AZN 100,000 for each deposit contract”, the report says.