Transformation of Para Bank to Non-bank Credit Organization Illegal - Economist

The economist Akram Hasanov called illegal the process of transformation of Para Bank, whose license was revoked in July 2016, into a non-bank credit organization.

On his profile on Facebook the expert said the elimination of Para Bank is not yet completed, so it is impossible to transform it into other companies, including non-bank credit organization.

He stressed that the name of the bank, which is under liquidation, has changed, plus the Financial Markets Supervision House has issued a license.

"To change the title they should hold a general meeting of shareholders, but in this case this is not possible, as the company is in the process of liquidation. In addition, the license may not be issued to a person who is annihilated," Hasanov said.

The economist said that in the world practice this has not happened - as a result of the change of name Para Bank has disappeared and its elimination has not yet been completed.

On the other hand, the expert noted that Para Bank has uninsured deposits and bank accounts of legal entities.

"Taking deposits and maintaining bank accounts are purely banking authorities. It turns out that non-bank organization has deposits and bank accounts. This is hitherto unknown lawlessness,” Hasanov said.

The expert noted that the leaders of the former Para Bank could establish a non-banking organization and the House could issue it a license.

"To do this, they had to eliminate Para Bank till the end and to return all the debts. If at the end of the process a property had remained, it could have been transferred to the new organization. However, current processes, namely the establishment of an NBCO on the basis of the liquidated bank is nonsense, and it has no legal explanation," Hasanov stressed.

According to the expert, Para Bank has some important property, or some vague affairs, which the owners do not want to give up, and for some reason the House helps them.

It should be noted that, according to the report by the Deposit Insurance Fund on December 19, insured deposits of 42 million 907 thousand manat were offset, which is 98% of the insured deposits.    ------71D