High business risks forcing people to bring deposits to banks - expert
BAKU/04.02.14/TURAN : No reduction of interest , nor even tighter regulatory requirements of supervisory authorities were able to prevent the inflow of deposits to banks in recent years.
According to the Central Bank of Azerbaijan at the end of 2013 the volume of deposits reached a record level of 6.4 billion manat, increasing by 1.3 billion manat. It is 3 times more than the growth recorded in 2009 , when the global financial crisis was raging in all .
What caused this level of inflow of deposits to banks? The official position of the authorities, which has been repeatedly voiced , attributes this to the increase in the standard of living and welfare of the population and the advent of free funds that are invested in banks. According to official statistics, only in the past year the income grew by 8% reaching 37.5 billion manat. True, according to the same statistics, inflation eats 2.4% from the eight.
According to the expert of the aid to economic initiatives Samir Aliyev , one of the factors of this growth is the high level of risk for business in Azerbaijan . In this situation, the contribution of the bank to the public is reliable and sufficiently profitable investment . Especially in Azerbaijan deposit rates are among the highest in the region. Small banks have rates higher than those of larger , which is a direct result of limited access of banks to other sources of borrowing.
An important role for the high-stakes race for deposits plays consumer lending, which in recent years has gained momentum . But amid the decisions of the Central Bank of curtailing banks items in retail chains , as well as a ban on the issuance of credit without certificate of this type of lending is likely this year to slow down . As a result, we should expect lower rates on household deposits at the level of 1-1.5% , the expert added .
Average rate on deposits by the CBA at the end of November last year was 8 %. The maximum amount of insurance compensation to one input on standards of the Azerbaijan Deposit Insurance Fund is 30,000 manat. Since August 1, 2013 the Fund has not insured deposits at interest rates exceeding 10 % per annum. - 15B -