Reason for Closure of Bank of Azerbaijan

The Central Bank of Azerbaijan (CBA) for the first time changed the wording in the revocation of bank licenses. Whereas in other cases it referred to the inadequacy of the ownership capital, in the case of Bank of Azerbaijan OJSC a claim of a different kind was filed. The decision to terminate the activities of the bank was due to the extremely low capital adequacy (below 3%). In addition, the management is not able to fulfill the demands of creditors and the bank does not comply with prudential norms.

According to the CBA, in accordance with the law on banks, an interim administration has been appointed for JSC Bank of Azerbaijan. At the same time the investors will not suffer because their investments are covered by the warranty of the Azerbaijan Deposit Insurance Fund, so ADIF will pay the compensation.

OJSC Bank of Azerbaijan began operations under the name Rabbatbank on December 1, 1993. In 1998, it became Ish Bankasi Azerbaycan. In 2004 the bank became a JSC.

The bank’s owners are members of the family of the President of Baghlan Group Azerbaijan, Hafiz Mammadov. Shareholders of Bank of Azerbaijan are his sons Kanan Mammadov (43.63%) and Sanan Mammadov (43.63%), his brother Mubariz Mammadov (12.07%) and NEM Holding (0.67%). --17D-