Depositors of Four Closed Banks Paid 45 Million AZN as Compensation

Since early August Azerbaijan Deposit Insurance Fund (ADIF) has paid to depositors of Deka Bank, Credo Bank, Zamin Bank and Para Bank compensation amounting to 45 million AZN, the Fund said in a statement..

The licenses of the above banks were canceled on July 21 by the Board of Directors of the Financial Markets Control House.

According to Turan, Para Bank depositors were paid 16.9 million AZN, Zamin Bank depositors were paid 20.7 million  AZN, Credo Bank depositors were paid 5.2 million AZN and Deka Bank depositors were paid 2.2 million AZN as compensation.

Earlier, a financial expert, a member of the Bar Association Akram Hasanov told Turan that many entities introduced a limit on payment - monthly up to 5 thousand AZN, while foreign currency deposits are returned for some reason in manats at the exchange rate of the Central Bank of Azerbaijan. "That is, the statements on the normal mode do not fit into the situation when customers are returned their money in installments. Under the current Civil Code, deposits must be returned 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, which by the way, provides for the conversion of deposits from one currency to another, but only at a rate agreed with the client."

ADIF started operating on August 13, 2007. According to the decision of the Board of Trustees of ADIF, since March 1, the upper limit of the interest rate on insured deposits in foreign currency decreased from 12 to 3%. The upper limit for annual interest rate on insured deposits in the national currency is 12%.

According to the law "On full deposit insurance", for three years, the population's deposits, the annual interest rate on which does not exceed the maximum level set by the Board of Trustees of ADIF, will be insured, regardless of the amount of the deposit in banks that are members of the Fund.    ----74D