Banking ‘Leapfrog’ Continues

The latest developments in the banking sector of Azerbaijan gave rise to many questions about what is happening in this sector.

For a long time the vast majority of commercial banks do not sell foreign currency to the population, which has led to a revival of the "black" market.

It is rumored that a number of banks are the main providers of currency on the "black" market, although there is no direct evidence of this.

Recent changes in the leadership of some banks again actualized the issue of cooperation of commercial banks and illegal currency traders.

December 2 there was a change of leadership in Azer Turk Bank: Khalid Ahadov took over the post of Chairman of the Board instead of Farhad Adygezalov, who held the post since 2014.

Adygezalov’s deputy Afig Khudayev also left his post.

However, less than a week ago Ahadov was appointed head of the International Bank of Azerbaijan, succeeding Elmar Mamedov, managing the bank in 2015, after the resignation of Jahangir Hajiyev sentenced to 15 years.

The new head of Azer Turk Bank became Orkhan Huseynov. Interestingly, Khalid Ahadov and Orkhan Huseynov were once the leaders of the recently liquidated Bank Standard (chairman and his deputy, respectively).

Banking circles do not exclude that in the future Azer Turk Bank and International Bank of Azerbaijan could be combined.

Immediately following the decisions on mixing Azer Turk Bank and the International Bank, rumors appeared in the press on the banks having connection with the "black" market. This in particular was written by the well-known economist Gubad Ibadoglu on his Facebook page.

According to him, the problem will continue to exist around IBA until it is privatized. The private shareholders of the bank are closely watching that the management does not steal. If at the time IBA had been privatized as international financial institutions advised, the theft of such a large scale would not have happened.

"I believe that next year, IBA and Azer Turk Bank should be prepared for privatization, and this process should be completed as soon as possible,” wrote Gubadoglu.

The Head of FMSH Rufat Aslanli, speaking recently at a banking forum, also said that in 2017 it is planned to complete the preparation of the International Bank for privatization.

Against this background, Amrah Bank popular among the population for the purchase and sale of foreign currency closed its offices for foreign exchange transactions. If other banks buy, but do not sell foreign currency, then the bank has suspended all kinds of operations.

In banking circles they reported that FMSH imposed a ban on Amrahbank currency buying and selling, but there is no official confirmation of this.

The expert Natig Jafarli believes that all of this turmoil in the banking sector is connected with the lack of currency and towards the end of the year, all these problems will be further exacerbated.

“The Central Bank stopped intervening in the foreign exchange market, the State Oil Fund of the limit on currency sales too close to exhaustion.

SOFAZ can offer only USD 150-160 million until the end of the year, which is very small to meet the demand.” he said.

It should be noted that since the middle of October the dollar has been steadily increasing. If October 18 the dollar was worth 1.5969 manat, on December 9 it was established at the level 1.7430 manat. -71D-