Azerbaijan may change interest rate on deposit insurance?

In most Azerbaijani banks, annual interest rates on deposits in both national and foreign currencies are much lower than the established limits on annual interest rates on protected deposits, Agshin Jahangirov, deputy executive director of the Deposit Insurance Fund, said in an interview with Report.

He noted that even the taxation of deposits from February 1 this year did not have a significant impact on the increase in annual interest rates: “In this regard, the issue of the upper limit of the annual interest rate on protected deposits in both national and foreign currencies remains relevant. However, the issue under consideration is constantly in the spotlight, any change in the banking system and in the deposit market is analyzed and discussed. Given the changes that may occur in the financial market in the future, the issue of changing this limit may be considered by the Board of Trustees of the Fund."

As for the maximum limit of the amount of compensation, Jahangirov noted that the basic principles adopted by the International Association of Deposit Insurers (IADI) are applied here: “In accordance with world practice, the maximum amount of compensation should fully apply to least 80% of depositors, and in total at least 20% deposits. Currently, the maximum limit set in Azerbaijan fully covers 99.8% of depositors and 41.2% of total deposits of individuals.”