Introduction of Interim Administration in Four Banks Does Not Mean Preparation for Devaluation - Akram Hasanov

Baku / 27.04.20 / Turan: The introduction by the Central Bank of the interim administration in four banks of Azerbaijan led to the appearance of talk about the upcoming devaluation.

The decision of the Central Bank affected Atabank, NBC, Amrahbank and AGBank.

In social networks, there were suggestions that such a decision was made to prevent fraud from some banks during the devaluation.

Commenting on the decision of the Central Bank for Turan, banking expert Akram Hasanov said that this could not be connected with the devaluation plans.

“I’m not sure that the decision on devaluation can stumble only on these four banks. Is it only they can cheat? The decision of the Central Bank is connected with the problems that these banks have been experiencing for a long time,” he said.

The expert recalled that Atabank and NBC can no longer be considered banks, because they have problems that cannot be solved. In his opinion, in two other banks - Amrahbank and AGBank, the situation was difficult, but not critical.

“The problems of these banks are related to the repayment of loans. For a long time there was an ambiguous situation in the field of financial regulation. The Financial Markets Supervision Chamber did not want to take decisive steps. After this Chamber was abolished and the powers were given to the Central Bank, Elman Rustamov did not know whether he would remain or not in his post. Therefore, he also did not undertake to solve these problems. However, after he was once again appointed head of the Central Bank, he is already forced to take steps,” Akram Hasanov said.

According to him, introducing the interim administration, the Central Bank will check the possibility of preserving these banks.

“Everything will depend on the quality of loans issued by these banks. Checking loans will provide an opportunity to make a decision. If problem loans have guarantees, namely, pledges and the like, then it is clear that they are not completely hopeless and they can someday be returned through the court. In this case, the Central Bank will not close these banks. And if the CBA considers the loans of a bank to be completely hopeless, then there is no other way to close it,” Akram Hasanov said.

At the same time, he noted that usually these cases are conducted in Azerbaijan in an opaque way.

“It would be better if the Central Bank conducted a transparent audit of these banks and gave the public accurate information. In this case, everyone would be able to assess how justified the decisions made on these banks were,” he concluded.  –71B-