"Only a small part of the uninsured deposits of 21 closed banks have been returned"

Gunay Bank OJSC, another bank in Azerbaijan, has had its license revoked by the Central Bank (CBA) since May 17. The decision was made by the CBA board due to Gunay Bank's total capital falling below the required minimum amount. The bank has not yet issued a response to the decision.

Since the global oil price decline in 2014-2015, approximately 20 banks in Azerbaijan have been liquidated. The CBA emphasized that Gunay Bank represents a small portion of the country's banking system, accounting for 0.6 percent of assets, 1 percent of the loan portfolio, and only 0.5 percent of sector liabilities. The cancellation of Gunay Bank's license is not considered a threat to financial stability.

Rufat Guliyev, a deputy, stated that healthy competition exists in Azerbaijan's banking sector, told Turan that around 8-10 responsible banks out of the current 24 active ones will remain. He highlighted their responsibility to the state, the financial system, and depositors.

Banking expert Akram Hasanov argued that a monopoly exists within Azerbaijan's banking sector, with interconnected banks effectively controlled by a single entity. Hasanov also noted that small banks have been exiting the market, and medium-sized banks may face a similar fate in the future. He questioned why Gunay Bank did not act sooner if it was genuinely concerned about raising capital, implying that the decision to revoke the license was influenced by the bank's plans to increase its capital.

Hasanov  told Radio Azadlig, that out of the 21 closed banks in Azerbaijan, only a small portion of uninsured deposits were returned to citizens, while the rest were informed that no funds were available. In contrast, in Europe and the United States, a committee of creditors with extensive control powers oversees the liquidation process. In Azerbaijan, the Deposit Insurance Fund is controlled by the Central Bank, resulting in a system where the Central Bank initiates liquidation, transfers assets to the Fund, and restricts the rights of creditors to close the process.