Azerbaijani banks urge to extend law on full deposit insurance

Banks operating in Azerbaijan have appealed to the government with a request to extend the period of the law "On full deposit insurance" until December 4 this year, Report says.

This issue was discussed at a meeting held on March 4 at the Central Bank of Azerbaijan (CBA). Now banks are waiting for the decision of the country's leadership in this regard.

"As far as we know, this issue was discussed in the Financial Stability Board, which supported the initiative," Chairman of the Azerbaijan Banks Association (ABA) Zakir Nuriyev told Report.

"We believe that at this stage government support is advisable in solving the problem, and senior management endorses these initiatives," Nuriyev said. "We believe that at the first meeting of the new composition of the Azerbaijani parliament, a bill will be adopted to extend the period of the law 'On full deposit insurance' until December 4 this year."

The decision on full deposit insurance entered into force on March 4, 2016, for a period of three years. The goal was to prevent the outflow of deposits from banks after two manat devaluations in 2015. On March 4 last year, the Azerbaijani parliament extended the law for another year.

The adoption of the law paid off, since already three months after the document entered into legal force, bank deposits in Azerbaijan began to grow again and reached AZN 8.8 billion (about $5.17 billion) in October last year, renewing a four-year high.