Are there a guarantee for depositors of troubled banks?

Since early August Azerbaijan Deposit Insurance Fund (ADIF) has paid to depositors  of Dekabank, Kredobank, Zaminbank and Azerbaijan's Parabank, whose licenses were canceled on July 21 by the Board of Directors of the Chamber of supervision of financial markets, compensation for AZN 34.3 million.

According to Fund reports today,  the joint  amount of compensated deposits of AZN 110.71 million,it means that one third of the amount  has been paid. According to experts, this process will extend for a long time.

According to the financial expert, member of the Bar Association Akram Hasanov,  many of the structures introduced a limit on payment - monthly to 5.000 AZN; and foreign currency deposits are returned for unclear reason in  manats at the exchange rate of the Central Bank of Azerbaijan. "That is, the statements of the normal regime do not fit into the situation when customers return the money in installments. Under the current Civil Code, contributions must be paid without restrictions. In addition, the funds of depositors  are to be paid in the currency in which they were invested. From this point of view, we are witnessing a flagrant violation of the law, by the way, providing  for the conversion of deposits from one currency to another, but only at the rate agreed with the client. "

The legal background of the actions of the Chamber on supervision  financial markets, that set the limit in force in the absence of a judicial decision, remains unclear. Does this mean that the supervisory structure could in its sole discretion to reduce monthly payments, change the order of payment, or even  delay it for a few months? That is, in the absence of a financial recovery plan the depositors are not protected, and as the warranty has been removed, and are forced to trust an honest way. By the way,  that is why all  the depositors of these banks want to  return their funds, and they are many of them, considering another troubled Bank Standard.

ADIF started operating August 13, 2007

By the decision of the Board of Trustees ADIF Board on March 1, upper limit of the interest rate on insured deposits in foreign currency decreased from 12 to 3%. Upper limit of the annual interest rate on insured deposits in the national currency is 12%. According to the law "On the full deposit insurance" for three years deposits from the public, the annual interest rate which does not exceed the maximum level set by the ADIF Board of Trustees, will be insured, regardless of the amount of the deposit in banks that are members of the fund. This means  investors who previously invested in dollars and euros from 4 to 12% per annum. --17D-