Gubad Ibadoglu: Problems of Banking Sector to Entail Serious Social Consequences
In Azerbaijan there are 1,273 loan and deposit accounts per 100 people.
The remaining external debt of the banking sector is 6.4 billion manat, the economist Gubad Ibadoglu wrote on Facebook.
If the Central Bank is not able to properly adjust its monetary policy soon, the existing problems of the banks will give rise to serious social consequences and economic hardship.
“Growing tensions in the relations between banks and customers, increase in poor and dangerous loans, reduction and dollarization of deposits, decrease in assets of the banking sector and the increase in the proportion of the residual amount of external debt in total liabilities and other negative tendencies require the Central Bank to take serious and urgent measures,” Ibadoglu says.
According to statistics, in 2013, for every 1,000 adult residents of Azerbaijan there were 1,244 credit and deposit accounts. In 2014 there were 1,259 and in the first quarter of 2015 – 1,273.
"This means that every citizen of Azerbaijan in one form or another is in contact with banks. Therefore, the closure or bankruptcy of banks can lead to social cataclysms," said Ibadoglu.
According to him, the problem of the banks is not only with domestic customers, but also with external financial institutions.
"So, according to March 31, 2015, the remaining external debt of the banking sector in Azerbaijan amounted to 6.4 billion manat or 22 percent of total liabilities. After the devaluation of the manat banks faced problems in implementing the commitments made in foreign currency, and their financial situation is deteriorating," said Ibadoglu. -03D06-
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